CBSE Class 12 Economics On Utility Worksheet

 

Question. Utility is a……….. aspect and differs from person to person
(a) Absolute
(b) Subjective
(c) Objective
(d) Irrelevant
Answer: B

Question. MUx is the marginal utility of product X and Px is the price of the product, a rational consumer will consume Product X until-
(a) MUx> Px
(b) Mux< Px
(c) MUx=0
(d) MUx= Px
Answer: D 

Question. Consumers surplus left with consumer under price discrimination is-
(a) Zero
(b) Maximum
(c) Minimum
(d) Not predictable
Answer: B

Question. Under marginal utility analysis, utility is assumed to be a-
(a) Cardinal concept
(b) Ordinal concept
(c) Infinite concept
(d) Modern concept
Answer: A 

Question. Marginal utility can be stated as-
(a) TUn-TUn-1
(b) Additional utility derived from additional unit of a commodity.
(c) Change in total utility / change in quantity
(d) All of the above
Answer: D

Question. According to Marginal utility analysis, utility can be measured in
(a) Ranks
(b) Nominal value
(c) Cardinal numbers
(d) All of the above
Answer: C

Question. Under Cardinal approach to utility, …….. is the measuring rod of utility
(a) Money
(b) Time
(c) Customer satisfaction
(d) All of the above
Answer: A

Question. Which of the following is not an assumption under cardinal approach of utility analysis
(a) Utility is goods are independent of one another
(b) Marginal utility of money is constant.
(c) Utility is comparable across the goods
(d) Utility cannot be measured, but only ranked
Answer: D

Question. Law of diminishing marginal utility applies only if………..measurement to utility is assumed.
(a) Cardinal
(b) Ordinal
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: A

Question. As per law of diminishing marginal utility, the more a consumer consumes a product, he derives………. Utility from additional consumption
(a) Lesser
(b) Equal
(c) Higher
(d) Infinite
Answer: A

Question. Which law states that the more a consumer consumes a product, he
(a) Law of Equi-marginal utility
(b) Law of diminishing marginal utility
(c) Law of cardinal utility
(d) Law of Demand
Answer: B

Question. The cardinal approach of utility analysis assumes that utility is measurable and quantifiable. This means-
(a) Utility can be expressed in numbers
(b) Utility can be ranked across the products
(c) Utility schedule is derived by the consumer
(d) All of the above
Answer: A

Question. Suppose the price of new bike is 15000 and Mr. M.S values new bike at 14000.
What will be the consumer surplus if Mr. Dhoni buys the bike?
(a) 29000
(b) 1000
(c) 0
(d) Nothing can be said
Answer: C

Question. In the concept of consumer Equilibrium and consumer surplus, for the quantity purchased at equilibrium level marginal utility is-
(a) Positive
(b) Negative
(c) Equal to price
(d) Zero
Answer: C

Question. ……… is derived from different units of commodity consumed by a consumer.
(a) Total utility
(b) Marginal utility
(c) Average utility
(d) Ordinal utility
Answer: A

Question. ……… is the additional utility derived from additional unit of a commodity
(a) Marginal utility
(b) Total utility
(c) Ordinal utility
(d) Average utility
Answer: A 

Question. Utility -
(a) Differs from person to person
(b) Differs from time to time
(c) Differs from product to product
(d) All of the above
Answer: D 

Question. Marginal utility will always show-
(a) Increasing trend
(b) Decreasing trend.
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: B

Question. Which of the following statement is not correct
(a) Cardinal approach provides basis for law of demand
(b) Cardinal approach assumes money measurement concept
(c) Cardinal approach to utility explains the relationship between
(d) Cardinal approach to utility do not assume consistency of money
Answer: D

Question. Utility is applicable -
(a) Only for socially desirable goods
(b) Only for harmful goods like liquor, cigarettes etc
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C

Question. Marginal utility-
(a) Will always be positive
(b) Will always be negative
(c) Can be positive or negative but not zero
(d) Can be positive or negative or zero
Answer: D

Question. Which of the theories are applicable under cardinal approach to utility?
(a) Law of diminishing marginal utility
(b) Law of Equi-Marginal utility
(c) Consumer surplus theory
(d) All of the above
Answer: D

Question. The Law of Diminishing Marginal Utility states that all else equal as consumption increases the marginal utility derived from each additional unit……..
(a) declines
(b) increases
(c) goes up to zero
(d) remains constant
Answer: A

Question. Each want is ……….
(a) Non satiable
(b) Limited
(c) unlimited
(d) Satiable
Answer: D

Question. Marginal utility of goods increases as the quantity …………. Goods with the consumer increases.
(a) Complementary
(b) Substitute
(c) Giffen
(d) All of the above
Answer: A

Question. MU of the goods decreases as the quantity of ………. goods with the consumer increases.
(a) complementary
(b) Substitute
(c) Both (a) and (b)
(d) None of the above
Answer: B

Question. When the economists speak of utility of a certain product, they are referring to-
(a) Demand of the product
(b) Usefulness of the product
(c) Satisfaction derived from the product
(d) Price of the commodity
Answer: C

Question. Marginal utility approach is also called as -
(a) Hicks and Allen approach
(b) Modern approach
(c) Ordinal approach
(d) Cardinal approach
Answer: D 

Question. Total utility derived by Miss Katrina by consuming 10 Mangoes is 99, where the total utility on consumption of 11 Mangoes is 95. What is the marginal utility of 11th Mango?
(a) -4
(b) -194
(c) -1
(d) 900
Answer: A

Question. Marginal utility of a commodity depends on its quantity and is-
(a) Inversely proportional to its quantity
(b) Not proportional to it quantity
(c) Independent of its quantity
(d) None of the above
Answer: A 

Question. Utility may be affected by presence of?
(a) Complementary goods
(b) Substitute goods
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C 

Question. Utility theories seek to explain how a consumer spends his income on different goods and services so as to ……….
(a) Become wealthy
(b) survive
(c) Match standard of living
(d) Attain maximum satisfaction
Answer: D

Question. Marginal utility curve is……….
(a) Downward sloping
(b) Slopes from left to right
(c) Negatively sloped
(d) All of the above
Answer: D

Question. Utility can be measure and quantified under-
(a) Cardinal Approach
(b) Ordinal approach
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: A

Question. State which of the following statement is false in context of cardinal approach to utility-
(a) A person can express the satisfaction derived from consumption of a commodity in quantitative terms.
(b) It is possible to express which commodity gives better utility and by how much.
(c) Utilities derived from different commodities are not independent of one another and affects one another
(d) It is assumed that marginal utility of money is constant.
Answer: C

Question. Utility obtained from tea is affected by availability of sugar. This statement is-
(a) True
(b) False
(c) Partially True
(d) Cannot be commented at all
Answer: A

Question. State whether the given statement is true or false-‘ Utility means usefulness
(a) True
(b) False
(c) Partially true
(d) Cannot be commented at all
Answer: B

Question. Which of the approaches uses money measurement concept of utility?
(a) Cardinal
(b) Ordinal
(c) Neither (a) nor (b)
(d) Both (a) and (b)
Answer: A

Question. ………… is the power of a commodity to satisfy a human want
(a) Utility
(b) Money
(c) Price
(d) None of the above.
Answer: A

Question. Buyer’s willingness to pay is that buyer’s-
(a) Minimum amount he is willing to pay for a product
(b) Producer’s surplus
(c) Maximum amount he is willing to pay for a product
(d) Consumer’s surplus
Answer: C

Question. As per the cardinal approach-utility is………aspect.
(a) psychological
(b) non quantifiable
(c) quantifiable
(d) irrelevant
Answer: C

Question. Law of diminishing marginal utility does not apply to………..., where personal preferences are dominant
(a) Music
(b) hobbies
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C

Question. The concept of utility is ethically neutral- this statement is
(a) True
(b) False
(c) Partially true
(d) Cannot be commented at all
Answer: B

Question. Cardinal approach to utility analyses-.
(a) One commodity at a time
(b) Two commodities at a time
(c) Many commodities at a time
(d) Does not analyse any commodity at a time
Answer: A

Question. Law of diminishing marginal utility, the more a consumer consumes a product, he derives lesser Utility from ………. consumption.
(a) Lower
(b) Infinite
(c) Additional
(d) No extra
Answer: C

Question. ‘Second glass of water gives lesser satisfaction to a thirsty person’. This is a case of
(a) Law of Equi- Marginal utility
(b) Law of diminishing return
(c) Law of Demand
(d) Law of diminishing marginal utility
Answer: D

Question. Marginal utility is-
(a) additional utility derived from additional unit of a commodity
(b) change in the total utility resulting from one- unit change in consumption of commodity, per unit of time
(c) Both (a) and (b)
(d) None of above
Answer: C

Question. Total utility that Mr. Khan derives from consumption of 10 Frooti is 250.
MU of 11th frooti is -60. What will be the total utility of 11 frooti?
(a) -60
(b) 250
(c) 190
(d) 310
Answer: C

Question. Marginal utility varies………. With the supply.
(a) directly
(b) inversely
(c) simultaneously
(d) None of the above
Answer: B

Question. In the above diagram, consumer attains equilibrium by consuming……. units
(a) OA
(b) OC
(c) MM’
(d) None of the above
Answer: B

Question. Law of diminishing marginal utility will not hold good income of the consumer-
(a) Increases
(b) Decreases
(c) Remains constant
(d) Both (a) and (b)
Answer: D

Question. As per Law of diminishing marginal utility, if the liking of the person increases on additional consumption the law will hold good. This statement is
(a) False
(b) True
(c) Partially true
(d) Noting can be said
Answer: A

Question. As per assumption to Law of diminishing marginal utility, in case of Money, gold, etc. greater quantity may-
(a) Increases the lust and utility thereof
(b) decreases the lust and utility thereof
(c) No effect on utility at all
(d) Nothing can be said
Answer: A

Question. Which of the following is not a consumption
(a) Burning of crackers in diwali
(b) Eating ice cream
(c) Burning gas when cooking food
(d) Burning of bike in an accident of fire
Answer: D 

Question. Which of the following is not a necessary assumption to cardinal utility theory?
(a) Rationality of the consumer
(b) Constant marginal utility of money
(c) Additively of utility
(d) Perfect competitive market
Answer: D

Question. All wants of an individuals are not of:
(a) Immediate importance
(b) Fixed importance
(c) Equal importance
(d) All of the above
Answer: D 

Question. Law of diminishing marginal utility is based on the assumption that the habits and tastes of the consumer-
(a) Must remain constant
(b) Must change
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: A

Question. In the above diagram, consumer surplus is given by-
(a) Area under OMBC
(b) Area under OABC
(c) Area under AMB
(d) None of the above
Answer: C

Question. Which of the following is an assumption of Law of Diminishing Marginal utility?
(a) Continuous consumption
(b) Constant demand
(c) Perfect competition
(d) Ordinal approach to utility
Answer: A 

Question. Which of the following is an assumption of Law of Diminishing Marginal utility?
(a) Different units consumed should be identical in all respect
(b) The Fashion, habit or taste of the consumer must remain constant.
(c) All of the above
Answer: C

 

 

a. When marginal utility is zero, Total utility will be:

A. Increasing. B. Diminishing C. Constant D. Zero

 

b. When MUx/PXx > Muy/Py, Consumer will buy :

A. More units of Y and less units of X C. More units of both X and Y

B. More units of X and less units of Y D. More units of Y and same units of X

 

c. If a commodity is available at free of cost, how many unit will a consumer consume in order to be at equilibrium?

 

d. State the law of diminishing marginal utility.

 

e. Define utility.

 

 

a. Why should a consumer buy more units of a good when its price falls? Explain in terms of utility analysis.

b. What are the assumptions of utility analysis of consumer behavior?

c. Distinguish between cardinal measurement and ordinal measurement

d. What are the limitations of utility analysis

e. Lakshmi purchases 5 units of ice cream when its price was Rs.10 per unit and is at equilibrium. Should she consume more or less to be at equilibrium when its price decreases to Rs.5 per unit? State reason.

 

 

a. How many units of a commodity should a consumer consume in order to maximize her satisfaction? Explain in terms of utility analysis.

b. A consumer consumes two goods, good X and good Y. Prices of the two goods are Px and Py respectively. Explain how consumer reaches equilibrium in the consumption of two goods.

c. Consider the following utility schedule. How many units of a commodity should a Consumer consume to be in equilibrium if market price of the good is Rs. 3 per unit? Explain with reason.