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Law of Diminishing Marginal Utility

Total utility...

Question

Total utility of a commodity is measured by which price of that commodity?

A

Value in use

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B

Value in exchange

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C

Both (A) and (B)

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D

None of these

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Solution

The correct option is B Value in use

Total utility refers to the total satisfaction obtained from the consumption of all possible units of a commodity. It measures the total satisfaction obtained from consumption of all the units of that good.

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Similar questions

Q. As a consumer, would you equate price of a commodity with total utility or marginal utility? Give reason in support of your answer.

Q. Given below is the utility schedule of a consumer for commodity-X. The price of the commodity is Rs. 6 per unit. How many units should the consumer purchase to maximise satisfaction? (Assume that utility is expressed in units and 1 util = Rs. 1). Give reasons for your answer.

Consumption (Units)	Total Utility (Utils)	Marginal Utility (Utils)
1	10	10
2	18	8
3	25	7
4	31	6
5	34	3
6	34	0

Q. The total utility is a good measure of a goods price.

Q. __________ refers to the exchange value of a commodity expressed in terms of money.

Q. The consumer is in equilibrium and is consuming commodity

- X

only. The marginal utility from last unit consumed of commodity

- X = 50

M U_{M} = 10

. Find the price of the commodity

- X

.

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