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Theory Of Consumer Behaviour

Question

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When marginal utility is negative, total utility ___________.

Total utility increase at decreasing rate

Total utility starts diminishing

Average utility becomes zero

Total utility becomes negative

Solution

B.

Total utility starts diminishing

Some More Questions From Theory Of Consumer Behaviour Chapter

Distinguish between 'Change in demand' and 'Change in quantity demanded of a commodity'.

Starting from an initial situation of consumer's equilibrium, suppose that marginal utility of a rupee increases. Will it increase or decrease the quantity demanded of the product?

What are two approaches to attain the state of consumer's equilibrium?

Define indifference curve.

What is meant by marginal rate of substitution (MRS)?

Why is MRS always diminishing?

When does a consumer attain equilibrium according to indifference curve approach?

Give meaning of demand.

Name two determinants of demand.

List the factors that cause changes in demand.

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