Chapter 5 Consumer Behavior and Utility Maximization

Which of the following statement is true for Theory of Consumer Behaviour?

• To reduce the risk in purchasing

• To maximize their benefits or sense of achievement

• To increase the awareness be a smart consumer

• To increase the income

Which following is one of the Theory of Consumer Behavior?

• Cardinal Utility Theory

• Supply and Demand

• Marginal Utility

• Laissez-faire Capitalism

The unit used to measure the utility is called...

• kilogram

• unit

• util

• RM

The principle of the budget constraint...

• 
• 
• 
• 

Factor which affect budget constraint are...

• Number of goods

• Price of goods

• Types of goods

• Market Need

How many assumptions considered in the analysis of the indifference curve?

• Two

• Five

• None

• Four

When Total Utility is increasing, Marginal Utility will be ________.

• zero

• negative

• positive

• one

The following are the characteristics of indifference curves except...

• Sloping upward

• Bowed or convex to origin

• Does not cross

• Further from the origin is more preferable

Consumer utility maximization occurs when the indifference curve is ________ to budget constraint.

• less

• tangent

• more

• zero

Calculate the Marginal Utility per dollar (MU/P)

One milk tea costs RM8. Siva bought two and the Marginal Utility is 60 utils.

• 7.5

• 3.75

• 30

• 4