Home » Economics-Consumer behaviour (SSSCE/WASSCE) 1. As the consumption of a commodity increases, the Marginal Utility eventuallyWASSCE 2007 remains constantfluctuatesincreasesdiminishes2. At any point where marginal utility becomes negative total utilityWASSCE 2006 decreases.is constantis zeroincreases3. To the rational consumer, the price of a good depends onSSSCE 2003 average utilitymarginal utilityMarginal revenuetotal revenue4. If the marginal utility of a commodity x is greater than the price of x, then theSSSCE 2003 consumers purchase of x is risingconsumer must reduce purchase of xconsumers utility of money is fallingconsumer is indifferent between x and income5. When consumers are in equilibrium, the marginal utilities of the commodities they consume areSSSCE 2003 higher than the commodity priceslower than the commodity pricesproportional to the commodity pricesinversely related to the commodity price6. When the marginal utility is equal to zeroSSSCE 2003 average utility begins to falltotal utility is at its maximumaverage utility is at a maximumtotal utility is negative7. Total utility is the satisfaction derived from theSSSCE 2002 additional unit of a commodityamount spent on a commoditystock of commodities one hasfirst unit of a commodity8. All consumers are expected to maximizeWASSCE 2011 utilityprofitinvestmentefficiency9. The demand curve for a good is negatively sloped becauseSSSCE 2001 marginal utility increases with additional consumptiontotal utility rises as more of a commodity is consumedmarginal utility falls with increasing consumptionthe total utility becomes negative with increasing consumption10. When a consumer pays a high price for a commodity, it means hisSSSCE 1997 total utility for the commodity is highaverage utility for the commodity is stablemarginal utility for the commodity is highaverage utility for the commodity is high11. As more of a good is consumed, the satisfaction derived from each additional unit falls in accordance withSSSCE 2002 rule of preferencelaw of diminishing returnslaw of diminishing marginal utilityscale of preference12. What is the marginal utility for consuming the 4th unit?SSSCE 2004 637413. The law of diminishing marginal utility is normally used to explain theSSSCE 2003 slope of the demand curveslope of the total product curveshape of the production possibility curveeconomies and diseconomies of scale14. Consumers' adjustment to relative price changes is termed asSSSCE 2001 income effectsubstitution effectwealth effectdemonstration effect15. Individual economic units economize their resources in order toSSSCE 2002 increase their level of savingsmaximize utilityeliminate the problem of scarcityeliminate waste16. In a single commodity market, the consumer is in equilibrium whenSSSCE 2000 marginal utility is greater that the price of the commoditymarginal utility is equal to price of the commoditytotal utility is greater than the price of the commoditytotal utility is equal to the price of the commodity17. The consumer is assumed to always seek to maximizeSSSCE 2001 utilityproductionprofitincome18. Households are assumed to maximizeSSSCE 2001 profitssavingssatisfactionoutput19. Diminishing marginal utility can be used to explain theSSSCE 2000 diseconomies of scaleslope of the demand curvelaw of comparative costslope of the total product curve20. When a consumer spends all his resources on a single commodity, he will be in equilibrium whenSSSCE 2002 marginal utility is greater .than price of the commoditytotal utility is greater than the price of the commoditymarginal utility is equal to the price of the commoditytotal utility is equal to the price of the commodity Loading... Share this:Click to share on WhatsApp (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)