Theory of Consumer behavior

Question 1

Another name for Cardinalist approach

Answer 1

Marginal Utility Theory

Question 2

What century economists led the mut

Answer 2

19th century

Question 3

Names of the economists that led the Cardinalist Approach

Answer 3

Karl Menger
Alfred Marshall
Leon Walras
Williams Stanley Jevons

Question 4

Unit for measuring utility

Answer 4

Utils

Question 5

Utility is measured in cardinal sense. Explain

Answer 5

Utility can be quantified or measured numerically in subjective units called Utils

Question 6

Explain constant MU of money

Answer 6

MU of money remains constant as income increases or decreases. The importance is unchanged

Question 7

Another name for the ordinalist approach

Answer 7

Indifference curve theory

Question 8

The ordinalist approach was led by

Answer 8

J Hicks
Vilfredo Pareto
RJ allen
E slutsky

Question 9

What century economists were the ordinary approach leaders

Answer 9

20th

Question 10

Ordinalist approach is measured in ordinal sense. Explain

Answer 10

An individual can rank a bundle of goods in the order of the satisfaction he or she gets from consuming them

Question 11

Indifference curves, budget lines and law of marginal rate of substitution are used to explain?

Answer 11

The indifference curve theory

Question 12

What are the concepts anchoring the cardinalist approach

Answer 12

Total Utility
Marginal Utility
Law of diminishing marginal utility

Question 13

What is Total Utility

Answer 13

Total satisfaction derived from the consumption of some quantity of a good or service

Question 14

Formula for TU

Answer 14

TUx= f(Q)
TU of commodity x is determined by how much of commodity x is consumed

Question 15

What is Marginal Utility

Answer 15

Additional satisfaction derived from the consumption of an extra unit of a commodity , when the levels of consumption remain constant

Question 16

Explain the law of marginal utility

Answer 16

As more units of a commodity is consumed, the utility of every MU diminishes

Question 17

State the law of diminishing mu

Answer 17

As more and more units of a commodity is consumed, the TU increases but at a finishing rate

Question 18

Budget line

Answer 18

It is a line in commodity space, showing the combination of two commodities the consumer can buy with his income and the market prices of the two commodities

Question 19

Budget line is also known as?

Answer 19

Budget constraint,consumer possibility or line and the income line