Economics

Question 1

1The law of diminishing marginal utility states that

Easy

A. total utility always falls B. prices fall as income rises C. satisfaction always rises equally D. each extra unit consumed gives less additional satisfaction

Question 2

2A consumer buys goods X and Y priced GH¢2 and GH¢4. At equilibrium, if MUx = 10, then MUy must be

Hard

A. 5 B. 40 C. 20 D. 10

Question 3

3The paradox of value (water–diamond paradox) is explained by

Medium

A. taxation B. supply only C. total cost D. marginal utility

Question 4

4Total utility from 1, 2 and 3 oranges is 10, 18 and 24 units. What is the marginal utility of the third orange?

Easy

A. 24 B. 10 C. 6 D. 8

Question 5

5Utility is the

Easy

A. quantity supplied B. satisfaction derived from consuming a good C. cost of production D. price of a good

Question 6

6A consumer is in equilibrium with two goods when

Medium

A. MUx = MUy B. MUx/Px = MUy/Py C. total utility is zero D. Px = Py

Question 7

7Consumer surplus is the difference between

Hard

A. what a consumer is willing to pay and what they actually pay B. income and spending C. supply and demand D. price and cost

Question 8

8Total utility is maximised when marginal utility is

Easy

A. zero B. negative C. maximum D. equal to price

Question 9

9A consumer gets the most satisfaction from a budget when

Medium

A. the marginal utility per cedi is equal for all goods B. all money is spent on one good C. the cheapest goods are bought D. total utility is zero

Question 10

10When marginal utility is zero, total utility is

Easy

A. negative B. zero C. falling fast D. at its maximum