Chapter 2: Consumption Analysis — Online MCQ Test
ECONOMICS · CLASS 11th · Tamil Nadu State Board
Practice Chapter 2: Consumption Analysis with a free chapter-wise online MCQ test.
This chapter covers: Focusing on consumer behavior this chapter details human wants utility concepts law of diminishing marginal utility and law of equi-marginal utility. Students study consumer surplu....
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Chapter 2: Consumption Analysis — Important Questions & Answers
What is defined as the want-satisfying power of a commodity?
- A. Utility
- B. Price
- C. Demand
- D. Supply
Answer: A. Utility
Utility is the technical term in economics used to describe the satisfaction derived from the consumption of a commodity.
Utility is the technical term in economics used to describe the satisfaction derived from the consumption of a commodity.
Which economist introduced the concept of 'Consumer Surplus'?
- A. Alfred Marshall
- B. Adam Smith
- C. Lionel Robbins
- D. J.R. Hicks
Answer: A. Alfred Marshall
Alfred Marshall is credited with formalizing the concept of consumer surplus in his work 'Principles of Economics'.
Alfred Marshall is credited with formalizing the concept of consumer surplus in his work 'Principles of Economics'.
Which of the following is NOT a characteristic of human wants?
- A. Wants are unlimited
- B. Wants are recurring
- C. Wants are satiable
- D. Wants are independent
Answer: D. Wants are independent
Wants are not independent; they are often complementary or competitive, making this statement incorrect.
Wants are not independent; they are often complementary or competitive, making this statement incorrect.
Consider two goods X and Y. A consumer is in equilibrium when _______.
- A. MUx/Px = MUy/Py
- B. MUx = MUy
- C. Px = Py
- D. MUx * Px = MUy * Py
Answer: A. MUx/Px = MUy/Py
Consumer equilibrium is achieved when the ratio of marginal utility to price for all goods is equalized.
Consumer equilibrium is achieved when the ratio of marginal utility to price for all goods is equalized.
In the context of the Law of Equi-marginal Utility, what is the impact of a rise in the price of Good X on the equilibrium state?
- A. MUx/Px becomes less than MUy/Py
- B. MUx/Px becomes greater than MUy/Py
- C. The consumer increases consumption of X
- D. The consumer stops consuming both goods
Answer: A. MUx/Px becomes less than MUy/Py
A rise in Px reduces the ratio MUx/Px, causing it to fall below MUy/Py, prompting the consumer to shift spending to Good Y.
A rise in Px reduces the ratio MUx/Px, causing it to fall below MUy/Py, prompting the consumer to shift spending to Good Y.