Question 1

Consider and think about your household (family).

a) Does the concept of maximizing utility apply to your household (family)? Why or why not? Explain

briefly. (2 marks)

b) Which product gives the highest marginal utility to your family? Discuss briefly.

Does this product also give the highest marginal utility per taka? Discuss briefly.

What is the consumer surplus of this product? Discuss using the equation of consumer surplus.

(6 marks)

c) Give an example of how the law of diminishing marginal utility affects you or your family? Discuss

briefly. (2 marks)