Question map
Not attempted Correct Incorrect ★ Bookmarked
Loading…
Q91 (CDS-I/2019) Economy › Basic Concepts & National Income › Consumer theory basics Answer Verified

Which one of the following statements is not correct?

Result
Your answer: —  Â·  Correct: D
Explanation

The relationship between total utility (TU) and marginal utility (MU) is a fundamental concept in consumer theory. As long as MU is positive, TU increases. When TU reaches its maximum point, MU is exactly zero, representing the point of satiation [1]. If consumption continues beyond this point, MU becomes negative, causing TU to decrease [1]. Therefore, statements 1, 2, and 3 are correct economic principles. Statement 4 is incorrect because at the point where TU is maximum, MU is zero, while average utility (AU) is typically positive (TU divided by quantity). MU and AU are generally equal only when AU is at its maximum, not when TU is at its maximum. This distinction is crucial in understanding the law of diminishing marginal utility [1].

Sources

  1. [1] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > Table 2.1: Values of marginal and total utility derived from consumption of various amounts of a commodity > p. 10
How others answered
Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.
Community Performance
Out of everyone who attempted this question.
100%
got it right
✓ Thank you! We'll review this.

SIMILAR QUESTIONS

CDS-II · 2014 · Q96 Relevance score: 6.26

Which of the following statements are correct? 1. .When marginal revenue is positive, total revenue increases with increase in output. 2. When marginal revenue is zero, total revenue is maximum. 3. When marginal revenue becomes negative, total revenue falls with increase in output , Select the correct answer using the code given below:

CDS-II · 2014 · Q91 Relevance score: 4.92

Which one among the following pairs is not correctly matched ?

IAS · 2024 · Q96 Relevance score: 4.38

Consider the following statements : Statement-I : The European Parliament approved The Net-Zero Industry Act recently. Statement-II : The European Union intends to achieve carbon neutrality by 2040 and therefore aims to develop all of its own clean technology by that time. Which one of the following is correct in respect of the above statements ?

CDS-II · 2024 · Q70 Relevance score: 4.16

Which one of the following statements for a firm's equilibrium in Perfect Competition is not correct? (a) The market price must be greater or equal to average variable cost in the short run. (b) The market price must be equal to marginal cost. (c) The market price must be equal to average cost in the long run. (d) The marginal cost decreases at the equilibrium output.

CDS-I · 2024 · Q105 Relevance score: 3.79

Which of the following statements is not correct? (a) The market mechanism over-produces a good that generates positive externality. (b) A cap and trade of pollution permits can be used by the government to achieve the social optimum. (c) The optimal amount of subsidy in the case of an activity that produces a positive externality is the difference between the social benefit and the private benefit at the optimum. (d) Tragedy of Commons is an example of negative externality.