Question : Statement 1: The concept of marginal utility becomes irrelevant when the consumer faces perfect competition.
Statement 2: In perfect competition, the consumer is a price taker and must accept the market price without considering individual preferences.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statement 1 and statement 2 are true.
Option 4: Both statement 1 and statement 2 are false.
Correct Answer: Both statement 1 and statement 2 are false.
Solution : The correct answer is (d) Option D: Both statement 1 and statement 2 are false.
Statement 1 is false. The concept of marginal utility remains relevant regardless of the market structure. Marginal utility measures the additional satisfaction or benefit derived from consuming one additional unit of a good, and it is a fundamental concept in consumer theory.
Statement 2 is also false. In perfect competition, while consumers are price takers and have no individual influence on the market price, they still consider their individual preferences and utility when making consumption decisions. They are not solely driven by the market price without considering their own preferences.
Question : Assertion: The concept of marginal utility becomes irrelevant when the consumer faces perfect competition.
Reason: In perfect competition, the consumer is a price taker and must accept the market price without considering individual preferences.
Question : Statement 1: The concept of consumer surplus represents the additional satisfaction gained by consuming a good.
Statement 2: Consumer surplus can be calculated by finding the difference between the total utility and the marginal utility of the last unit consumed.
Question : Statement 1: The consumer achieves equilibrium when the marginal utility per dollar spent is equal for all goods.
Statement 2: At equilibrium, the consumer maximizes their total utility within the constraints of their budget.
Question : Statement 1: The concept of consumer equilibrium assumes that the consumer has perfect information about prices and product attributes.
Statement 2: The consumer's equilibrium is based on rational decision-making and the pursuit of maximum satisfaction.
Question : Statement 1: A consumer achieves equilibrium by consuming equal quantities of all goods.
Statement 2: The concept of consumer equilibrium assumes that the consumer's goal is to maximize their total utility.
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