Utility and rational consumer behaviour

The table presents the total utility a consumer obtains as more apples are eaten (apples consumed: 0→6; total utility: 0,10,18,24,28,30,30). At what consumption level does marginal utility become zero?

Feb/March 2019

The diagram illustrates a total utility curve for a consumer. At which point is marginal utility zero?

Feb/March 2020

The diagram illustrates a consumer’s total utility. Which curve would indicate that marginal utility is diminishing?

Feb/March 2020

Explain how a consumer’s rational behaviour, marginal utility, prices of different goods and the demand for a good are related.

Feb/March 2020

In what way can the idea of marginal utility account for the downward-sloping shape of the demand curve?

Feb/March 2022

Utility theory is founded on the assumption of the ‘rational consumer’. What must be done to act as a ‘rational consumer’?

Feb/March 2023

Good S costs $6 and good T costs $8. The consumer’s marginal utility for each good is shown. If this consumer aims to maximise total utility, which combination of goods should be consumed?

Feb/March 2023

A person purchases two pairs of socks. What result does the purchase of the second pair of socks produce?

Feb/March 2024

Explain what is meant by the Law of Diminishing Marginal Utility and judge whether the statement above applies it correctly.

May/June 2006

The diagram illustrates the marginal utility (MU) gained by an individual from a good at various consumption levels. The utility obtained from the final $ he spends on each good is 3 units. If the marginal utility of money is assumed to stay constant, which quantity will he buy when the price of the good is $10?

May/June 2010

The diagram illustrates the marginal utility (MU) an individual obtains from a good at various levels of consumption. The utility gained from the last $ he spends on each good is 3 units. If the marginal utility of money is assumed to remain constant, which quantity will he buy when the price of the good is $10?

May/June 2010

The diagram illustrates the marginal utility (MU) an individual gains from a good at varying consumption levels. The utility gained from the last $ he spends on each good is 3 units. If the marginal utility of money remains constant, what quantity will he buy when the price of the good is $10?

May/June 2010

Do you agree with these assertions?

May/June 2010

A consumer aims to maximise his utility. Until what point should he keep consuming each good?

May/June 2011

A consumer aims to maximise his utility. Until what point should he go on consuming each good?

May/June 2011

A consumer aims to maximise his utility. How far should he keep consuming each good?

May/June 2011

Discuss whether demand schedules and budget line diagrams are similar in the way they illustrate the effect of

May/June 2011

The table gives the total utility an individual gains from consuming various quantities of a good. The individual’s marginal utility of money is $1 = 3 units of utility. What is the maximum quantity of the good that the individual will buy when its price is $4?

May/June 2012

The table gives the total utility an individual gains from consuming various quantities of a good. The individual’s marginal utility of money is $1 = 3 units of utility. What is the highest quantity of the good that the individual will purchase when the price is $4?

May/June 2012

A utility-maximising consumer uses all of his disposable income of $40 on food and clothing. The table gives the price of food, the amount bought by the consumer, and the marginal utility he gains from consuming food. His marginal utility from clothing is 2 units. What is the price per unit of clothing and the quantity bought by the consumer?

May/June 2012

Discuss the extent to which the law of diminishing marginal utility may be applied to determine the market demand for a good.

May/June 2012

Explain the theoretical connection among utility, price and the demand for a product.

May/June 2012

Explain, using a budget line diagram, whether (i) the substitution effect of a price change and (ii) the income effect would be the same for a normal good and an inferior good.

May/June 2012

The table gives the total utility an individual gains from consuming various quantities of a good. The individual’s marginal utility of money is $1 = 2 units of utility. What is the greatest quantity of the good that the individual will purchase when the price is $6?

May/June 2013

The table gives the total utility an individual gains from consuming different quantities of a good. The individual’s marginal utility of money is $1 = 2 units of utility. What is the greatest quantity of the good that the individual will purchase when its price is $6?

May/June 2013

The table gives the total utility an individual gets from consuming various quantities of a good. quantity of good (units) / total utility (units): 1->20, 2->36, 3->48, 4->56, 5->60, 6->62 The individual's marginal utility of money is $1 = 2 units of utility. What is the greatest quantity of the good that the individual will purchase when the price is $6?

May/June 2013

Explain how a consumer distributes expenditure according to the principle of equi-marginal utility and analyse how a change in income could affect that distribution.

May/June 2013

A consumer aims to maximise his utility. To what extent should he keep consuming each good?

May/June 2014

A consumer aims to maximise his utility. Until what point should he keep consuming each good?

May/June 2014

Consumer demand can sometimes be shaped by advertising and at other times by impulse buying. Because of this, the economic theories of consumer demand grounded in utility are irrelevant to any firm that is trying to work out its probable revenue. Do you agree with this claim?

May/June 2014

‘Marginal utility as an explanation of consumer equilibrium applies only to the purchase of one good, cannot be used when incomes increase, and does not apply if advertising changes tastes. In practice, it is not a useful guide to consumer behaviour'. Assess this opinion.

May/June 2014

A consumer’s demand may sometimes be shaped by advertising and at other times by impulse buying. This suggests that the economic theories of consumer demand based on utility have no relevance to a firm that is trying to predict its likely revenue. Do you agree with this argument?

May/June 2014

An economy redistributes resources and moves along its production possibility frontier. It raises the output of necessity goods and lowers the output of luxury goods. The marginal utility enjoyed by the consumers of the extra necessity goods produced is higher than the marginal utility enjoyed by the consumers of the luxury goods that are no longer produced. What effect does this have on the economic efficiency of the economy?

May/June 2015

A household that uses all of its income to buy bananas and apples faces the following unit prices ($): bananas $2.50; apples $1.00. The household gains twice as much utility from the last banana consumed as from the last apple consumed. What action should the household take in order to maximise utility from consuming these fruits?

May/June 2015

A consumer aiming to maximise utility uses all of his disposable income of $40 on food and clothing. The table gives the price of food, the quantity bought by the consumer, and the marginal utility he gains from consuming food. His marginal utility from clothing is 2 units. What is the price per unit of clothing and the quantity bought by the consumer?

May/June 2015

The diagram illustrates the marginal utility (MU) that an individual obtains from consuming varying quantities of good X. At the margin, the individual gains two units of utility for every $1 spent. If the price of X is $2, which quantity of good X will he buy?

May/June 2015

In a perfect market and with a fixed income, economic analysis shows how a rational consumer chooses the quantities of products to demand. However, it cannot explain what occurs when incomes change or when businesses in imperfect markets influence prices. Discuss whether you agree with this opinion about the economic analysis of consumer behaviour.

May/June 2015

Describe how consumer theory suggests a rise in income will alter a consumer’s demand for a normal good and for an inferior good.

May/June 2015

To obtain the greatest satisfaction from a fixed level of expenditure on two goods, X and Y, a consumer should divide spending between the two goods so that

May/June 2016

Why does an individual’s demand curve usually slope downwards from left to right?

May/June 2017

The diagram illustrates the marginal utility (MU) an individual gains from a good at various levels of consumption. The utility gained from the last $ he spends on each good is 4 units. If the marginal utility of money is assumed to remain constant, what quantity will he buy when the price of the good is $10?

May/June 2017

Compare how a demand curve for a product is derived using the marginal utility theory with how it is derived using indifference curve theory.

May/June 2017

Explain how utility theory may be used to show why a demand curve slopes downward.

May/June 2017

Explain, with the help of a diagram, diminishing marginal utility and how it is connected to indifference curves.

May/June 2018

Explain why the concept of the margin matters in the economic theory of consumer behaviour.

May/June 2018

The graph illustrates the total utility (TU) that a consumer gains from eating biscuits during one hour. After consuming how many biscuits does the consumer’s marginal utility start to fall?

May/June 2019

A consumer purchases goods X and Y. The marginal utility of good X is above zero and decreasing. The consumer has reached the point at which the ratio of the marginal utilities of the two goods is the same as the ratio of their prices. What may be concluded from this information?

May/June 2020

Which buying or consumption action is most likely to show the law of diminishing marginal utility?

May/June 2021

Donald gets the highest utility from purchasing paperback books and audio books. A paperback book costs $3 and an audio book costs $6. If the marginal utility of the most recent paperback book was 12 units of utility (utils), what was the marginal utility of the most recent audio book bought?

May/June 2021

Which act of buying or consuming is most likely to demonstrate the law of diminishing marginal utility?

May/June 2021

Explain what the concept of the ‘equilibrium position of a consumer’ means and how the concept can be used to construct a demand curve for a good.

May/June 2021

Explain what is meant by the concept of the ‘equilibrium position of a consumer’ and how the concept might be used to construct a demand curve for a good.

May/June 2021

What is the core principle of marginal utility theory?

May/June 2022

What is the main principle of marginal utility theory?

May/June 2022

What is illustrated by the marginal utility diagram?

May/June 2023

What does the marginal utility diagram indicate?

May/June 2023

Which statement concerning the concept of utility is correct?

May/June 2024

The table sets out the total utility a consumer obtains from drinking water. quantity consumed (bottles); total utility: 0->0, 1->30, 2->40, 3->48, 4->54, 5->58. What conclusion can be drawn from this table?

May/June 2024

Which statement correctly describes the concept of utility?

May/June 2024

What does the equi-marginal principle mean?

May/June 2025

A consumer uses all income to buy only two goods, X and Y. At first, the consumer is in equilibrium and is maximising total utility. Then the consumer’s preferences alter, so that consuming good Y gives less utility. The prices of both goods stay unchanged. What response would be rational for the consumer?

May/June 2025

What does the equi-marginal principle mean?

May/June 2025

My higher income will make me happier in the short term. In the long term I will grow used to it and my happiness will fall back to its earlier level. Therefore, there is no point in earning a higher income.

Oct/Nov 2006

Economic analysis of resource allocation assumes consumers are rational. If advertising is present, this analysis has little value. Do you agree with this argument?

Oct/Nov 2008

The diagram illustrates a person's marginal costs and marginal benefits from going to the cinema. How many trips will that person make?

Oct/Nov 2009

The table indicates the total utility gained by a consumer from good X at various consumption levels. The consumer receives two units of satisfaction from the final cent spent on each good she buys. What is the greatest number of units of X that she will consume if the price of X is 6 cents?

Oct/Nov 2009

In the diagram, a person first selects combination N on budget line LM. When his money income rises and the price of good Y also rises, his budget line moves to RS, and he then selects combination T. What effect does this have on his economic welfare?

Oct/Nov 2009

The schedule indicates the total utility a consumer gains from good X at various consumption levels. She receives two units of satisfaction from the final cent spent on each good she buys. What is the largest number of units of X that she will consume if the price of X is 6 cents?

Oct/Nov 2009

In the diagram, an individual first selects combination N on budget line LM. If his money income rises and the price of good Y also rises, his budget line moves to RS, after which he selects combination T. What happens to his economic welfare?

Oct/Nov 2009

(i) Briefly explain how marginal utility theory can be used to show a rational consumer’s equilibrium.

Oct/Nov 2009

The table gives the total utility a consumer receives from good X at different quantities consumed. quantity of X consumed: 1,2,3,4,5,6,7; total utility (units): 30,50,65,75,80,83,84. The consumer gains three units of utility from the final $ she spends on each good that she buys. What is the greatest number of units of X that she will consume if the price of X is $5?

Oct/Nov 2010

The table indicates the total utility a consumer gains from good X at various consumption levels. The consumer receives three units of utility from the final $ she spends on each good she buys. What is the greatest number of units of X that she will consume if the price of X is $5?

Oct/Nov 2010

This table gives the total utility a consumer gets from good X at different consumption levels. consumed quantity of X 1 2 3 4 5 6 7 total utility in units 30 50 65 75 80 83 84 The consumer gets three units of utility from the last $ she spends on each good she buys. What is the largest number of units of X that she will consume if the price of X is $5?

Oct/Nov 2010

To obtain the greatest satisfaction from a fixed amount of spending on two goods, X and Y, a consumer should divide his expenditure between the two goods so that

Oct/Nov 2011

To achieve the greatest satisfaction from a fixed amount of spending on two goods, X and Y, a consumer should divide his expenditure between the two goods so that

Oct/Nov 2011

In which year did retail sales in the US stop rising?

Oct/Nov 2011

Explain how a consumer’s expenditure is related to the equi-marginal principle of utility.

Oct/Nov 2011

Explain what the term developing country means.

Oct/Nov 2011

The table provides data on an individual’s consumption of good X. price of good X $10 quantity demanded (units) 25 marginal utility (utils) 30. The diagram illustrates the marginal utility that a consumer obtains from consuming good Y. If the price of good X does not change, by what amount will the individual’s consumption of good Y rise when the price drops from $30 to $20?

Oct/Nov 2012

A consumer seeking to maximise his utility will organise consumption so that

Oct/Nov 2012

A household spends its entire income on bananas and apples, and buys the following: bananas 5 kg at $2.50/kg; apples 10 kg at $1.00/kg. The household gets twice the utility from the fifth kg of bananas as it gets from the tenth kg of apples. What action should the household take to maximise utility from buying these fruits?

Oct/Nov 2012

Explain how the law of diminishing marginal utility could be applied to build a consumer’s demand curve for a product.

Oct/Nov 2012

Explain how the idea of diminishing marginal utility can be used to build a demand curve for the product, and whether that reasoning still holds for demand for tickets for the exhibitions.

Oct/Nov 2012

Identify two reasons given for why people purchase virtual goods.

Oct/Nov 2012

Discuss the argument: ‘The attainment of equilibrium in a market depends entirely on the ability to measure marginal utility. Since this cannot be done, equilibrium in a market can never be achieved.’

Oct/Nov 2012

The table lists the marginal utility gained by a consumer who spends his entire weekly income of $42 on two goods X and Y. Good X costs $3 per unit and Good Y costs $6 per unit. To maximise his utility, what quantities of X and Y should the consumer buy?

Oct/Nov 2013

The table presents the total utility an individual gains from consuming various quantities of a good. The individual’s marginal utility of money is $1 = 2 units of utility. What is the greatest quantity of the good that the individual will purchase when its price is $6?

Oct/Nov 2013

The table presents the marginal utility obtained by a consumer who spends all of his weekly income of $42 on two goods X and Y. Good X costs $3 and Good Y costs $6. To maximise his utility, what quantities of X and Y should the consumer purchase?

Oct/Nov 2013

Explain how economic analysis suggests that consumers make choices when buying products and how they react to price changes.

Oct/Nov 2013

Use the theory of marginal utility to analyse how a consumer will normally buy more of a product at a lower price than at a higher price and explain how this theory can be used to derive a market demand curve.

Oct/Nov 2013

Explain how, under marginal utility theory, consumers move their expenditure from one product to another as prices change.

Oct/Nov 2013

The schedule indicates the total utility gained by a consumer of good X at various levels of consumption. The consumer gets two units of utility from the final $ spent on each good that she buys. What is the largest number of units of X that she will consume if the price of X is $5?

Oct/Nov 2014

A household buys the following fruit: bananas 5 kg at $1.00 per kg; apples 10 kg at $0.50 per kg. The utility from the tenth kg of apples is twice the utility from the fifth kg of bananas. What action should the household take to maximise utility from buying these fruits?

Oct/Nov 2014

A worker records the yearly monetary amounts she assigns to the benefits and drawbacks of a job: income $750; dangerous working conditions $500; long working hours $250; high prestige $200; cost of providing own uniform $150; opportunity for travel $100; short holidays $50. What conclusion can be drawn from the table?

Oct/Nov 2014

A consumer divides his spending among three goods, X, Y and Z. The table gives the consumer’s marginal utilities for these goods together with their prices. In what way should the consumer’s spending be redistributed so that utility is maximised?

Oct/Nov 2014

Analyse whether there is a distinction between: • the manner in which the effects of an increase in price are shown with a budget line, and • the manner in which the effects of an increase in price are shown with a demand curve based on marginal utility theory.

Oct/Nov 2014

‘Consumer purchases are determined by marginal utility. This by itself fixes market equilibrium in perfect competition. Supply is irrelevant.’ Is this correct?

Oct/Nov 2014

Consider whether this claim accurately summarises the economic analysis of consumer and producer equilibrium.

Oct/Nov 2014

The diagram illustrates a person’s marginal costs and marginal benefits from going to the cinema. How many trips will the person make?

Oct/Nov 2015

Using the total utility schedule (units: 1→20, 2→36, 3→50, 4→62, 5→72, 6→80) and the marginal utility of money $1 = 3 units of utility, what is the greatest quantity purchased when price = $4?

Oct/Nov 2015