1.1 The Concept of Utility

Question 1

_ is the level of satisfaction or pleasure derived from the consumption of a good or service.

Answer 1

Utility

Question 2

_ is the power of a commodity to satisfy human wants.

Answer 2

Utility

Question 3

In defining utility, it is important to bear in mind the following points:

Answer 3

• Relativity of Utility
• The utility of a product can be different at different places and times.
• ‘Utility’ and ‘usefulness’ are not synonymous

Question 4

_ : The utility of a commodity is subjective to a person’s needs.

Answer 4

Relativity of Utility

Question 5

_ is not absolute (objectively determined).

Answer 5

Utility (The utility of a commodity)

Question 6

T/F
The same commodity provides the same utilities to different consumers.

Answer 6

False, it’s different

Question 7

For the _ consumer, utility varies from unit to unit, from time to time, and from place to place.

Answer 7

same

Question 8

_ is the concern of a product whereas _ is the concern of the consumer.

Answer 8

Usefulness, utility

Question 9

Since utility is a _ concept, it is difficult to measure _, but economists try to quantify it in two different ways:

Answer 9

qualitative, quantitatively and cardinal utility and ordinal utility.