Map pling Please sort the following statements about utility. True False Utility
ID: 1188792 • Letter: M
Question
Map pling Please sort the following statements about utility. True False Utility is gained from the consumption Utility is the enjoyment a of goods but not services. person gains from consumption Models of consumer behavior assume that if a person earns S100 a week, he will choose the combination of goods, services, and savings that cost $100 and maximize his utility. As a rule, marginal utility increases Bob reports that he receives 7 units of utility from a as people consume more of a good cup of says that she receives 70 units of utility from a cup of the same kind of coffee. Carol definitely gets more utility from a cup of coffee than Bob doesExplanation / Answer
a. Utility is gained from the consumption of goods but not services - False, utility is gained from both goods and services
b. utility is the enjoyment a person gains from consumption - True, utility is the satisfaction, enjoyment or the usefulness gained by a person from consuming a good or getting a service.
c. Models of consumer behavior ..... - True, the consumer will spend as per the budget line and try to maximize utility
d. As a rule, marginal utility increases as people consume more of a good - False, marginal utility decreases as more quanities of a good is consumed, as the feeling of being content increases
e. Bob reports that he receives 7 units of utility from a cup of coffee ..... - False, comparing utilities of different people is meaningless as there is no easy way to interpret how different people come up with the value of utility they derive from consuming a product or a service