#1
Which utility refers to the satisfaction obtained from consuming the last unit of a good or service?
Total utility
Marginal utility
Ordinal utility
Cardinal utility
#2
Which type of utility is associated with the usefulness of a good in satisfying a particular want or need?
Total utility
Marginal utility
Ordinal utility
Useful utility
#3
Which factor does NOT affect consumer utility?
Taste and preferences
Income level
Price of related goods
The weather on the day of purchase
#4
What is the primary assumption behind the Law of Demand?
Consumers have unlimited income
Consumers have rational preferences
Consumers experience diminishing marginal utility
Consumers only consume inferior goods
#5
Which utility concept emphasizes the ranking of preferences rather than the measurement of satisfaction?
Total utility
Marginal utility
Ordinal utility
Cardinal utility
#6
Which of the following is a characteristic of a Giffen good?
As price increases, demand increases
As price decreases, demand increases
As price increases, demand decreases
As price decreases, demand decreases
#7
According to the Law of Diminishing Marginal Utility, what happens as a consumer consumes more units of a good or service?
Total utility increases continuously
Marginal utility increases continuously
Total utility decreases at a decreasing rate
Marginal utility decreases at a decreasing rate
#8
What is the Law of Substitution in the context of consumer choice?
Consumers will substitute one good for another to maximize total utility
Consumers will always prefer cheaper goods over more expensive ones
Consumers will always choose the combination of goods that gives the maximum total utility
Consumers will always allocate their income to maximize marginal utility
#9
What is the Law of Demand in economics?
As price increases, quantity demanded increases
As price decreases, quantity demanded decreases
As price increases, quantity demanded decreases
As price decreases, quantity demanded increases
#10
Which of the following is an example of an inferior good?
Luxury cars
Generic brands
Organic fruits
Designer clothing
#11
What is the Law of Equi-Marginal Utility?
Consumers will always choose the combination of goods that gives the maximum total utility
Consumers will allocate their income in such a way that the marginal utility of each good is equal
Consumers will always prefer more of a good that provides higher total utility
Consumers will always prefer cheaper goods over expensive ones
#12
In consumer theory, what does the term 'Indifference Curve' represent?
The combination of goods that provide the same level of satisfaction
The budget constraint of the consumer
The diminishing marginal utility of goods
The substitution effect between two goods
#13
According to the concept of 'revealed preference,' how can a consumer's preferences be determined?
By observing the consumer's actions and choices
By asking the consumer directly
By analyzing the consumer's income and expenses
By conducting market surveys
#14
What is the concept of 'Utility Maximization' in consumer theory?
Consumers seek to maximize total utility regardless of the cost
Consumers seek to maximize marginal utility
Consumers seek to minimize total expenditure
Consumers seek to minimize marginal utility
#15
In consumer choice theory, what is the significance of the budget line?
It represents the consumer's indifference curve
It shows all possible combinations of goods given the consumer's income and prices
It illustrates the law of demand
It depicts the substitution effect