Concept of Utility – Average, Marginal And Total Utility - SS2 Economics Past Questions and Answers - page 1
What does utility refer to in economics?
The satisfaction or happiness that a consumer derives from consuming a particular good or service.
The cost of producing a particular good or service.
The price of a particular good or service in the market.
What is average utility?
The additional satisfaction or happiness that a consumer gets from consuming one additional unit of a good or service.
The overall satisfaction or happiness that a consumer gets from consuming a particular quantity of a good or service.
The total utility derived from consuming a good or service divided by the quantity of the good or service consumed.
What is marginal utility?
The total satisfaction or happiness that a consumer gets from consuming a particular quantity of a good or service.
The additional satisfaction or happiness that a consumer gets from consuming one additional unit of a good or service.
The average level of satisfaction or happiness that a consumer derives from each unit of the good or service.
What is total utility?
The overall satisfaction or happiness that a consumer gets from consuming a particular quantity of a good or service.
The total cost of producing a particular good or service.
The price of a particular good or service in the market.
What happens to marginal utility as a consumer consumes more units of a good or service?
It stays the same.
It increases.
It diminishes.
Why is it important to understand the concept of utility in economics?
When might it not be worth it for a consumer to consume more units of a good or service?