Please explain each answers with clear explanations, thank you 1) The concept of
ID: 1098439 • Letter: P
Question
Please explain each answers with clear explanations, thank you
1) The concept of utility is:
A) objective so that psychologists can measure utility and compare one person's utility with that of another person.
B) subjective so there can be no true measurement ofsomeone's utility.
C) objective so that devices can be developed that would measure a person's utility
D) subjective so measurement of someone's utility must be done scientifically.
2) If Cy purchases more than one gallon of gas, then his consumer surplus is:
A) the difference between what he would be willing to pay and what he does pay.
B) the sum of what he is willing to pay and what he does pay.
C) what he does pay minus what he is willing to pay.
D) value of the last gallon purchased.
3) Marginal utility analysis is unrelated to the demand curve.
A) True
B) False
Explanation / Answer
1. B, subjective so there can be no true measurement of someone's utility
Utility is a subjective concept and it cannot be measured scientifically. All we can say that Ann likes 3 bananas to 2 bananas or Ann likes 2 bananas to 2 apples. We cannot but a utility number to Ann's utility from consumption.
2. A, the difference between what he would be willing to pay and what he does pay
From Britannica:
As first developed by Jules Dupuit, French civil engineer and economist, in 1844 and popularized by British economist Alfred Marshall, the concept depended on the assumption that degrees of consumer satisfaction (utility) are measurable. Because the utility yielded by each additional unit of a commodity usually decreases as the quantity purchased increases, and because the commodity