Match List-I with List-II
| List-I | List-II | ||
| (A) | Analysis assumes that level of utility can be expressed in numbers. | (I) | Cardinal Utility |
| (B) | Change in total utility due to consumption of one additional unit of a commodity | (II) | Law of Diminishing Marginal Utility. |
| (C) | Marginal utility from consuming each additional unit of a commodity declines as its consumption increases. | (III) | Marginal Utility |
| (D) | The amount of mangoes that the consumer has to forego in order to get an additional banana, her total utility level being the same. | (IV) | Marginal rate of substitution |
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A)-(I), (B)-(III), (C)-(II), (D)-(IV)
The four items are the basic terms of the two ways of studying consumer behaviour: cardinal utility analysis, which measures satisfaction in numbers, and ordinal utility analysis, which only ranks bundles and uses indifference curves.
(A) Analysis assumes that level of utility can be expressed in numbers. — this matches (I) Cardinal Utility. Cardinal utility analysis treats satisfaction as measurable in units, so one can say a bundle gives 50 units of utility and another 25.
(B) Change in total utility due to consumption of one additional unit of a commodity — this matches (III) Marginal Utility. If 4 bananas give 28 units of total utility and 5 bananas 30 units, the fifth banana adds 2 units; that addition is its marginal utility.
(C) Marginal utility from consuming each additional unit of a commodity declines as its consumption increases. — this matches (II) Law of Diminishing Marginal Utility. Each further unit adds less satisfaction than the one before, because the want is increasingly met.
(D) The amount of mangoes that the consumer has to forego in order to get an additional banana, her total utility level being the same. — this matches (IV) Marginal rate of substitution. Moving along an indifference curve, the rate at which she gives up mangoes for one more banana without changing her satisfaction is the MRS.
NCERT (2026-27): “2.1.1 Cardinal Utility Analysis … Cardinal utility analysis assumes that level of utility can be expressed in numbers. For example, we can measure the utility derived from a shirt and say, this shirt gives me 50 units of utility.… …Marginal utility (MU) is the change in total utility due to consumption of one additional unit of a commodity.… …An explaination for a downward sloping demand curve rests on the notion of diminishing marginal utility. The law of diminishing marginal utility states that each successive unit of a commodity provides lower marginal utility. …The amount of mangoes that the consumer has to forego, in order to get an additional banana, her total utility level being the same, is called marginal rate of substitution (MRS).…” |