Consumer Behaviour Quiz

What is utility?

• The cost of a product

• Satisfaction derived from consuming a commodity

• Total expenditure on a good

• The price of a good

Which of the following is an assumption of the cardinal school of thought?

• Utility cannot be measured

• Utility is constant

• Utility is measurable

• Utility is negative

What is total utility?

• The satisfaction from the first unit consumed

• The satisfaction derived from consuming a commodity at a point in time

• The cost of a product

• None of the above

How is average utility calculated?

• TU + Q

• TU - Q

• TU / Q

• Q / TU

What does the law of diminishing marginal utility state?

• Utility increases with consumption of additional units

• Marginal utility decreases with extra units consumed

• Marginal utility remains constant

• Utility cannot be measured

When is marginal utility zero?

• When the first unit is consumed

• When total utility is at its peak

• When no units are consumed

• When total utility starts increasing

What happens when marginal utility becomes negative?

• Total utility decreases

• Marginal utility increases

• Total utility increases

• None of the above

What is consumer surplus?

• The difference between anticipated payment and actual payment

• The total cost of a product

• The difference between total utility and marginal utility

• The amount paid for extra units consumed

Which of the following is true about the ordinal school of thought?

• Utility is measurable

• Utility is ranked at various levels

• Utility is constant

• Utility cannot be compared

What is the purpose of an indifference curve?

• It shows the quantity of a single good consumed

• It indicates levels of satisfaction from two goods

• It shows market price changes

• It shows total utility