Question 1

If utility is not maximized, then:
A) some change in consumption will increase satisfaction.
B) no change in consumption will increase utility.
C) only a change in income will increase utility.
D) only a change in price will increase utility.
E) the principle of diminishing marginal utility does not hold.

Accepted Answer

If utility is not maximized, it means there is still room for satisfaction to increase. Therefore, some change in consumption, such as consuming more of a preferred good or consuming less of an inferior good, will increase satisfaction and ultimately lead to utility maximization.

Question 2

Utility is most closely defined by which of the following terms?
A) Useful.
B) Worthiness.
C) Necessary.
D) Satisfaction.

Accepted Answer

Utility is often defined as the satisfaction or usefulness derived from a good or service. Therefore, choice D - satisfaction - is the most closely related term. Choices A, B, and C are related to utility, but do not fully capture its essence.

Question 3

​Which of the following best describes the economic concept of utility?
A) Utility is the total number of units a consumer buys.
B) Utility measures the usefulness of goods, such as tools or food, and so goods such as artwork or attractive landscaping by definition has no utility.
C) Utility measures the satisfaction, or pleasure, that people receive from consuming a good or service.
D) None of the above are correct.

Accepted Answer

Utility is the satisfaction, or pleasure, that people receive from consuming a good or service. It is based on individual preferences and can vary from person to person. The concept of utility is an important part of understanding consumer behavior and decision-making.

Question 4

A util:
A) can measure satisfaction with factual accuracy.
B) is not a valid concept.
C) applies to a good but not to a service.
D) is purely a fictitious measure of the satisfaction a consumer derives from a product.
E) can be used in place of money in some countries.

Accepted Answer

A util is a hypothetical unit of measurement used in economics to quantify the satisfaction or utility a consumer derives from consuming a product or service. It is not a real or tangible measure but a conceptual tool used to understand consumer preferences and behavior.

Question 5

Utility is:
A) easily measured, because all people derive the same utility from consumption.
B) easily measured, because it is an objective concept.
C) easily measured, because it is a subjective concept.
D) hard to measure, because it is a subjective concept.
E) hard to measure, because it is an objective concept.

Accepted Answer

Utility is a concept that refers to the satisfaction or happiness that a consumer derives from consuming a good or service. It is a subjective concept because different individuals can derive different levels of happiness from the same good or service. Therefore, utility cannot be objectively measured, and it is hard to quantify.

Question 6

The marginal utilities associated with the first 4 units of consumption of good Y are 10, 12, 9, and 7, respectively. What is the total utility associated with the third unit?
A) 3.
B) 9.
C) 25.
D) 31.
E) The amount cannot be determined from the marginal utilities.

Accepted Answer

The answer of The marginal utilities associated with the first...

Question 7

In the context of consumer choice theory, utility means:
A) usefulness.
B) satisfaction.
C) practicality.
D) boring.
E) action.

Accepted Answer

In consumer choice theory, utility refers to the satisfaction or pleasure that a consumer derives from consuming a particular good or service. Therefore, the best choice is option B - satisfaction.

Question 8

When total utility is at a maximum, marginal utility is:
A) zero.
B) positive.
C) negative.
D) one.
E) infinite.

Accepted Answer

When total utility is at a maximum, marginal utility is zero because any additional consumption does not increase total utility further.

Question 9

John loves to travel. He would never turn down the opportunity to go on a trip. This means that, for John:
A) the total utility of travel always increases.
B) marginal utility of travel never decreases.
C) the law of diminishing marginal utility does not apply to travel.
D) marginal utility of travel is always zero.
E) extra travel yields zero consumer surplus.

Accepted Answer

The answer of John loves to travel. He would never...

Question 10

What term do economists use to refer to the satisfaction that an individual expects to receive from consuming a good or service?
A) Utility.
B) Response.
C) Usability.
D) Demand.
E) Desirable.

Accepted Answer

Economists refer to the satisfaction that an individual expects to receive from consuming a good or service as utility. Utility is a measure of the level of satisfaction or happiness that a consumer derives from the consumption of a particular good or service.

Question 11

____ is the subjective measure of the physical and mental satisfaction that is anticipated from consumption.
A) Demand
B) Supply
C) Recognition
D) Utility
E) Cognition

Accepted Answer

Utility is the subjective measure of the physical and mental satisfaction that is anticipated from consumption. It is a key concept in economics and is used to explain the behavior of consumers in the market. The concept of utility helps in understanding how consumers decide what to buy and how much to pay for it.

Question 12

A util represents a unit of measurement for the:
A) dollars a consumer spends on a good.
B) profit a firm makes from producing a good.
C) way a consumer will respond to a change in price.
D) happiness a person obtains from consuming a good.
E) way a producer will respond to a change in price.

Accepted Answer

A util is a hypothetical unit used to measure the satisfaction or happiness that a consumer derives from consuming a good or service. It is used in the context of utility theory, which seeks to explain how consumers make choices based on the perceived benefits and costs of different options. A higher level of utility or satisfaction is typically associated with a greater willingness to pay for a good, and vice versa.

Question 13

Utility refers to the:
A) relationship of demand to the supply of a product.
B) satisfaction a consumer experiences after a good or service is purchased.
C) satisfaction a consumer expects to receive from a good or service.
D) ability of a good or a service to have value in the marketplace.
E) usefulness of the product consumed.

Accepted Answer

Utility refers to the satisfaction a consumer expects to receive from a good or service.

Question 14

The term utility refers to the:
A) usefulness of a good in relation to its scarcity.
B) necessity of a good.
C) price of a good.
D) number of goods a consumer has.
E) pleasure or satisfaction a consumer receives upon consuming a good.

Accepted Answer

Utility is the satisfaction or pleasure a consumer receives upon consuming a good. It is not related to the scarcity, necessity, price or number of goods a consumer has.

Question 15

Generally speaking, as more of a particular good is purchased, a consumer's marginal utility ____ and total utility ____.
A) increases; decreases
B) decreases; increases
C) increases; increases
D) decreases; decreases
E) generalizations cannot be made

Accepted Answer

As more of a particular good is purchased, the marginal utility (additional satisfaction received from each additional unit) tends to decrease, meaning that the consumer gets less and less extra satisfaction from consuming each additional unit. However, total utility (the overall satisfaction received from consuming all units of the good) can still increase as long as the marginal utility is positive (meaning each additional unit still provides some additional satisfaction). Therefore, as more units are purchased, marginal utility decreases and total utility increases at a decreasing rate, eventually reaching a point of saturation where total utility begins to decrease as well.

Question 16

The marginal utilities associated with the first 5 units of consumption of good Y are 15, 15, 10, 7, and 3, respectively. What is the total utility associated with those 5 units?
A) 5.
B) −12.
C) 12.
D) 35.
E) 50.

Accepted Answer

The answer of The marginal utilities associated with the first...

Question 17

The ability of a good to satisfy a want refers to its:
A) usefulness.
B) utility.
C) worthiness.
D) necessity.

Accepted Answer

Utility refers to the satisfaction or usefulness a good provides in satisfying a want. While usefulness and worthiness are related concepts, they do not fully capture the idea of satisfying a want. Necessity refers to something that is required, but not all wants are necessary.

Question 18

Utility is defined as the:
A) sense of pleasure or satisfaction derived from consuming goods and services.
B) cost of acquiring goods and services.
C) profits consumers earn from consuming goods and services.
D) monetary value to consumers of goods and services.
E) desire to consume goods and services.

Accepted Answer

Utility is the sense of pleasure or satisfaction derived from consuming goods and services. It is a subjective measure and varies from person to person. It cannot be quantified and is not the same as the monetary value of goods and services.

Question 19

The utility of a good is:
A) different for different consumers.
B) the same for all consumers.
C) constant no matter how much is consumed.
D) related to the cost of producing it.
E) easily measured.

Accepted Answer

The utility of a good is subjective and varies across consumers based on their individual preferences and circumstances. What is valuable to one person may not be as valuable to another.

Question 20

Which of the following statements is true about the total utility provided by a good?
A) Total utility can never be negative.
B) Total utility is maximized when marginal utility is maximized.
C) Total utility continues to increase as more of the good is consumed.
D) Total utility is maximized when marginal utility is zero (for total utility > 0).
E) Total utility is maximized when marginal utility is zero (for total utility < 0).

Accepted Answer

Total utility is maximized when the marginal utility of the last unit consumed is zero (for total utility greater than zero). This occurs because the marginal utility of each additional unit consumed decreases, eventually reaching zero. At this point, consuming any additional unit would actually decrease total utility. Therefore, total utility is maximized when no additional units can be consumed without decreasing total utility.

Quiz 6: Consumer Choice Theory

If utility is not maximized, then:

Utility is most closely defined by which of the following terms?

Which of the following best describes the economic concept of utility?

A util:

Utility is:

The marginal utilities associated with the first 4 units of consumption of good Y are 10, 12, 9, and 7, respectively. What is the total utility associated with the third unit?

In the context of consumer choice theory, utility means:

When total utility is at a maximum, marginal utility is:

John loves to travel. He would never turn down the opportunity to go on a trip. This means that, for John:

What term do economists use to refer to the satisfaction that an individual expects to receive from consuming a good or service?

____ is the subjective measure of the physical and mental satisfaction that is anticipated from consumption.

A util represents a unit of measurement for the:

Utility refers to the:

The term utility refers to the:

Generally speaking, as more of a particular good is purchased, a consumer's marginal utility and total utility .

The marginal utilities associated with the first 5 units of consumption of good Y are 15, 15, 10, 7, and 3, respectively. What is the total utility associated with those 5 units?

The ability of a good to satisfy a want refers to its:

Utility is defined as the:

The utility of a good is:

Which of the following statements is true about the total utility provided by a good?