CAIE A-Level Economics 7.1.5 Limits of Marginal Utility Theory

CAIE A-Level Economics 7.1.5 Limits of Marginal Utility Theory
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise evaluating whether diminishing marginal utility and rational, measurable choice can explain individual and market demand across different goods and services.

How this is tested

  • assess whether consumers possess information and consistency needed for rational utility maximisation
  • evaluate whether cardinal utility and individual demand can be aggregated into a market curve

Question 1

[Maximum number: 1]

Utility theory is based on the assumption of the 'rational consumer'.
What is necessary to act as a 'rational consumer'?

access to
complete
information

addictive
behaviour

choice is
independent
of other
consumers

no

yes

yes

yes

no

no

yes

yes

no

yes

no

yes