Choose the correct answer for each question in the quiz.
Economists define the term marginal utility (mu) as:
The additional satisfaction gained divided by the additional cost of the last unit.
Total satisfaction gained when consuming a given number of units.
The process of comparing marginal units of all goods, which could be purchased.
The additional satisfaction obtained by consuming one extra unit of a good.
Which of the following best describes consumer surplus?
The price consumers are willing to pay for a unit.
The cost of providing a unit.
The profits made by a firm.
The difference between the price a consumer pays for an item and the price he/she is willing to pay.
Utility of a product is:
The value of a product.
The contribution that a good or service makes to society.
The satisfaction that a consumer obtains from a good or service.
Any characteristic of a good or service that cannot be measured.
According to the Law of Diminishing Marginal Utility:
Utility is at a maximum with the first unit.
Increasing units of consumption increase the marginal utility.
Marginal product will fall as more units are consumed.
Total utility will increase at a decreasing rate as more units are consumed.
If the Marginal utility of the first bar of chocolate that Dan eats is 5 utils, then which of the following is most likely to be true?
Dan will eat 5 bars of chocolate.
The marginal utility of the second bar of chocolate that Dan eats will be less than 5 utils.
The marginal utility of the second bar of chocolate that Dan eats will be greater than 5 utils.
None of the above.
Utility is maximised when the utility for the last euro spent on each product is maximised, this is explained by
Law of Diminishing Marginal Utility.
Equi-Marginal Principle.
Total Utility.
Marginal Utility.
If a car is priced at €10,000 in a motor garage. You were willing to pay €12,000 for the car but you actually paid €9000, what is the consumer surplus?
€10,000.
€12,000.
€9,000.
€3,000.
Which of the following best describes producer surplus?
The difference between what a producer is willing to sell a good for and what they actually sell the good for.
The cost of providing a unit.
The profits made by a firm.
The difference between the price a consumer pays for an item and the price he/she is willing to pay.
The conundrum between valuable water and a relatively unusable diamond is explained by the
Paradox of life.
Paradox of count.
Paradox of utility.
Paradox of value.
A consumer increases their consumption from 2 to 4 units of a product.. As it does its total utility rises from 10 to 16 utils. The consumers marginal utility is: