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Which of the following is not the assumption of marginal utility analysis
a. constancy of marginal utility of money
b. hypothesis of independent utility
c. rational behaviour of the consumer
d. combination of two goods?
a. constancy of marginal utility of money
b. hypothesis of independent utility
c. rational behaviour of the consumer
d. combination of two goods?
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Which of the following is not the assumption of marginal utility analy...
Assumption of Marginal Utility Analysis
Constancy of Marginal Utility of Money
One of the assumptions of marginal utility analysis is the constancy of the marginal utility of money. This assumption states that the utility derived from money remains constant as more units of money are consumed. This assumption allows economists to analyze consumer behavior based on the marginal utility of goods and services rather than the absolute amount of money.
Hypothesis of Independent Utility
Another assumption is the hypothesis of independent utility, which suggests that the utility derived from one good or service is not affected by the consumption of another good or service. This assumption allows economists to analyze the utility derived from each individual good or service separately, without considering their interdependence.
Rational Behavior of the Consumer
The assumption of rational behavior of the consumer is also a key assumption in marginal utility analysis. This assumption posits that consumers make decisions based on maximizing their utility, given their budget constraints. By assuming rational behavior, economists can predict consumer choices and preferences based on the concept of marginal utility.
Combination of Two Goods
The assumption of combination of two goods is not a part of the assumptions of marginal utility analysis. This assumption implies that consumers only consume two goods, which is not realistic as consumers typically consume a variety of goods and services. Marginal utility analysis is based on the assumption of consuming multiple goods and services to analyze consumer behavior and preferences accurately.
Constancy of Marginal Utility of Money
One of the assumptions of marginal utility analysis is the constancy of the marginal utility of money. This assumption states that the utility derived from money remains constant as more units of money are consumed. This assumption allows economists to analyze consumer behavior based on the marginal utility of goods and services rather than the absolute amount of money.
Hypothesis of Independent Utility
Another assumption is the hypothesis of independent utility, which suggests that the utility derived from one good or service is not affected by the consumption of another good or service. This assumption allows economists to analyze the utility derived from each individual good or service separately, without considering their interdependence.
Rational Behavior of the Consumer
The assumption of rational behavior of the consumer is also a key assumption in marginal utility analysis. This assumption posits that consumers make decisions based on maximizing their utility, given their budget constraints. By assuming rational behavior, economists can predict consumer choices and preferences based on the concept of marginal utility.
Combination of Two Goods
The assumption of combination of two goods is not a part of the assumptions of marginal utility analysis. This assumption implies that consumers only consume two goods, which is not realistic as consumers typically consume a variety of goods and services. Marginal utility analysis is based on the assumption of consuming multiple goods and services to analyze consumer behavior and preferences accurately.
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Which of the following is not the assumption of marginal utility analysis a. constancy of marginal utility of money b. hypothesis of independent utility c. rational behaviour of the consumer d. combination of two goods?
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Which of the following is not the assumption of marginal utility analysis a. constancy of marginal utility of money b. hypothesis of independent utility c. rational behaviour of the consumer d. combination of two goods? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is not the assumption of marginal utility analysis a. constancy of marginal utility of money b. hypothesis of independent utility c. rational behaviour of the consumer d. combination of two goods? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is not the assumption of marginal utility analysis a. constancy of marginal utility of money b. hypothesis of independent utility c. rational behaviour of the consumer d. combination of two goods?.
Which of the following is not the assumption of marginal utility analysis a. constancy of marginal utility of money b. hypothesis of independent utility c. rational behaviour of the consumer d. combination of two goods? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is not the assumption of marginal utility analysis a. constancy of marginal utility of money b. hypothesis of independent utility c. rational behaviour of the consumer d. combination of two goods? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is not the assumption of marginal utility analysis a. constancy of marginal utility of money b. hypothesis of independent utility c. rational behaviour of the consumer d. combination of two goods?.
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