Question : Which of the following describes 'point of satiety' best
Option 1: TU starts falling
Option 2: TU reaches at its maximum
Option 3: MU is increasing
Option 4: TU is constant
Correct Answer: TU starts falling
Solution : The correct answer is (a) TU starts falling
The "point of satiety" refers to a situation where the total utility (TU) derived from consuming a good starts falling.
Initially, as the consumer consumes more units of a good, the total utility increases, but at a certain point, the additional units of the good provide less and less utility, eventually leading to a decrease in total utility. This is known as the point of satiety or the point of diminishing returns. At this point, the consumer's satisfaction or utility from consuming additional units of the good decreases.
Question : Which of the following statement is not true?
Option 1: As long as MU is positive, TU increases
Option 2: TU is zero when MU is zero
Option 3: TU starts decreasing when MU is negative
Option 4: After the point of satiety, MU becomes negative
Question : At the point of satiety MU will be:
Option 1: Positive
Option 2: Zero
Option 3: Rising
Option 4: None of these
Question : Which of the following statement is correct? (a) TU increases till MU is positive. (b) TU is maximum when MU is equal to zero. (c) TU declines when MU is negative.
Option 1: A only
Option 2: B only
Option 3: A and B only
Option 4: A B and C
Question : How is marginal utility determined?
Option 1: TU/Q
Option 2: Q/TU
Option 3: MU/Q
Option 4: Q/MU
Question : What formula is used to calculate marginal utility?
Option 1: MU/Q
Option 2: TU/Q
Option 3: Q/MU
Option 4: Q/TU
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