Question

Q1: Choose the BEST answer.

________ is the satisfaction or value people extract from consumed services or goods and those derived from pursued activities.

a. Equilibrium

b. Utility

c. Rational behavior

Q2: Choose the BEST answer.

Of the answers below, which of the statements is a true statement and is compatible with the properties of utility?

a. Khaleesi receives 10 utils from drinking a glass of milk and 15 utils from eating a chocolate chip cookie. Therefore, Khaleesi enjoys chocolate chip cookies more than milk.

b. Barnaby gets 25 utils from eating one salad while Justin receives 35 utils from eating one salad. Therefore, Justin likes salads more than Barnaby.

c. Ben receives 50 utils from watching playing a video game while Alex receives 70 utils from skateboarding. Therefore, Alex enjoys skateboarding more than Ben enjoys video games.

Q3: Choose the BEST answer.

Total utility is determined by

a. multiplying the marginal utility of the last unit consumed by the unit price.

b. adding up the marginal utilities of each unit consumed.

c. multiplying the marginal utility of the last unit consumed by the number of units consumed.

Answer 1

1. b. Utility
(Utility is the value derived from consuming a good.)

2. a. Khaleesi receives 10 utils from drinking a glass of milk and 15 utils from eating a chocolate chip cookie. Therefore, Khaleesi enjoys chocolate chip cookies more than milk.
(Utility that a person derive from consuming different goods can be compared as per the concept of utility because different people may assign different levels of utility to different goods which is not comparable.)

3. b. adding up the marginal utilities of each unit consumed.
(Total utility is the sum of marginal utilities from each unit consumed.)