Chapter 2 ECONOMICS : Theory of Consumer's Behaviour — Online MCQ Test
ECONOMICS · CLASS 11 INTER I YEAR · Andhra State Board
Practice Chapter 2 ECONOMICS : Theory of Consumer's Behaviour with a free chapter-wise online MCQ test.
This chapter covers: This chapter details cardinal and ordinal utility analyses law of diminishing marginal utility law of equi-marginal utility and consumer equilibrium using indifference curves..
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Chapter 2 ECONOMICS : Theory of Consumer's Behaviour — Important Questions & Answers
What is the satisfaction derived from the consumption of a single unit of a commodity known as?
- A. Total Utility
- B. Marginal Utility
- C. Average Utility
- D. Equi-marginal Utility
Answer: B. Marginal Utility
Marginal utility is the additional satisfaction obtained by consuming one extra unit of a good.
Marginal utility is the additional satisfaction obtained by consuming one extra unit of a good.
Who introduced the Cardinal Utility Analysis?
- A. Alfred Marshall
- B. J.R. Hicks
- C. Adam Smith
- D. Paul Samuelson
Answer: A. Alfred Marshall
Alfred Marshall is the main proponent of the cardinal utility approach, which assumes utility can be measured in numbers.
Alfred Marshall is the main proponent of the cardinal utility approach, which assumes utility can be measured in numbers.
In the Law of Equi-Marginal Utility, a consumer reaches equilibrium when:
- A. MUx = MUy
- B. MUx/Px = MUy/Py = MUm
- C. MUx + MUy = Income
- D. MUx > MUy
Answer: B. MUx/Px = MUy/Py = MUm
The condition for consumer equilibrium under this law is that the marginal utility per rupee spent on each good must be equal.
The condition for consumer equilibrium under this law is that the marginal utility per rupee spent on each good must be equal.
Why is an Indifference Curve convex to the origin?
- A. Due to constant Marginal Rate of Substitution
- B. Due to increasing Marginal Rate of Substitution
- C. Due to diminishing Marginal Rate of Substitution
- D. Because prices are constant
Answer: C. Due to diminishing Marginal Rate of Substitution
The convex shape represents the psychological principle that as we possess more of one good, we are willing to give up less of the other.
The convex shape represents the psychological principle that as we possess more of one good, we are willing to give up less of the other.
Given two bundles A and B, if a consumer is indifferent between them, then:
- A. A has more of both goods than B
- B. A and B provide the same level of utility
- C. B is preferred over A
- D. The consumer cannot choose between them due to price
Answer: B. A and B provide the same level of utility
Indifference means the consumer assigns the same satisfaction level to both combinations of goods.
Indifference means the consumer assigns the same satisfaction level to both combinations of goods.