All questions of Theory of Consumer Behavior for Economics Exam

• a)
  Market price of commodity X
• b)
  Market price of commodity Y
• c)
  Income of the consumer
• d)
  All of above

• a)
  Utility
• b)
  Consumption
• c)
  Supply
• d)
  Demand

• a)
  Additional consumption always yields extra utility
• b)
  Additional consumption leads to lower average total utility
• c)
  Additional consumption always yields negative utility
• d)
  After a point any addition in the consumption causes a reduction in total utility.

• A:

  Four commodities

• B:

  Less than two commodities

• C:

  Only two commodities

• D:

  More than two commodities

The answer is C.

• a)
  Isoquants
• b)
  Demand and supply curves
• c)
  Indifference curves
• d)
  None of above

• a)
  Zero
• b)
  Undefined
• c)
  Positive
• d)
  Negative

• A:

  It helps consumers to make choices.

• B:

  Utility is always measurable.

• C:

  It is a satisfying power of a commodity.

• D:

  It is purely a subjective entity.

The answer is B.

• a)
  Concave to the origin
• b)
   L-shaped
• c)
  Convex to the origin
• d)
  A vertical straight line

• a)
  Centimeter
• b)
  Seconds
• c)
  Gram
• d)
  Utils

• a)
  First falls and then rises
• b)
  Always falls
• c)
  Always rises
• d)
  First rises at an increasing rate, then rises at a decreasing rate and falls after reaching its maximum.

• a)
  Consumer surplus
• b)
  Price gap
• c)
  Consumer burden
• d)
  Optimum price

• a)
  Independent variable approach
• b)
  Cardinal utility approach
• c)
  Ordinal utility approach
• d)
  None of these

• a)
  Paul Samuelson
• b)
  Alfred Marshall
• c)
  Hicks & Allen
• d)
  Robbins

• a)
  When marginal utility remains constant
• b)
  When marginal utility is increasing
• c)
   When marginal utility is negative
• d)
  When marginal utility is negative

• a)
  Buyer’s surplus
• b)
  Elasticity of demand
• c)
  Differential surplus
• d)
   Indifference surplus

• a)
  Remains the same
• b)
  Is equal on the other side of the mid points
• c)
  Differs from point to point
• d)
  None of above

• A:

  The point where marginal utility becomes less than zero

• B:

  The point where marginal utility becomes greater than zero

• C:

  The point where marginal utility becomes zero.

• D:

  None of above

The answer is C.

• a)
  Ordinal approach
• b)
  Cardinal approach
• c)
  Both cardinal & ordinal
• d)
  None of these

• a)
  Utility can be measured, but cannot be ranked in order of preferences.
• b)
  Utility can neither be measured nor can be ranked in order of preferences.
• c)
  Utility can be measured and can also be ranked in order of preferences.
• d)
  Utility cannot be measured, but can be ranked in order of preferences.

• a)
  Indifference curves cannot intersect each other
• b)
  Two indifference curve can be tangent to each other
• c)
  Indifference curves are convex to the origin
• d)
  Indifference curves slopes downward to the right

• a)
  It helps consumers to make choices.
• b)
  Utility is always measurable.
• c)
  It is a satisfying power of a commodity.
• d)
  It is purely a subjective entity.

• a)
  Average utility
• b)
  Ordinal utility
• c)
  Marginal utility
• d)
  Total utility

• a)
  Isocost curve
• b)
  Marginal utility curve
• c)
  Indifference curve
• d)
  Isoquant

• a)
  Total marginal utility
• b)
  Total utility of a commodity
• c)
  Total average utility
• d)
  None of the above

• a)
  Combinations of goods which yield to a producer different levels of satisfaction
• b)
  Combinations of goods which yield to a consumer equal degrees of satisfaction
• c)
  Combinations of goods which yield to a consumer different levels of satisfaction
• d)
  A consumer’s preference for any two goods

• a)
  All commodities except money
• b)
  Bank money
• c)
  Money in the same manner as it applies on the commodity
• d)
  Cash but not on bank money

• a)
  Average utility
• b)
  Total utility 
• c)
  Marginal utility
• d)
  None of above

• a)
  The point where marginal utility becomes less than zero
• b)
  The point where marginal utility becomes greater than zero
• c)
  The point where marginal utility becomes zero.
• d)
  None of above

• a)
  Monetary value a consumer gains from consuming a particular good
• b)
  Difference between what a consumer is willing to pay and actually pays
• c)
  Desire to consume
• d)
  Satisfaction that a consumer derives from the consumption of a particular good.

• a)
  Marginal utility is zero.
• b)
  Average utility is equal to zero
• c)
  Average utility is maximum
• d)
  Marginal utility is maximum

• a)
  The point where marginal utility becomes less than zero
• b)
  The point where marginal utility becomes greater than zero
• c)
  The point where marginal utility becomes zero.
• d)
  None of above

• a)
  Horizontal
• b)
  Vertical
• c)
  Steeper
• d)
  Flatter
• e)
  In case of relatively more elastic, demand curve is:(i) Horizontal(ii) Vertical(iii) Steeper(iv) Flatter

• a)
  The point from where the consumer starts his consumption
• b)
  The position which the consumer cannot attain because his income is low
• c)
  The position of rest or maximum satisfaction with given income and prices
• d)
  The position of frequent movement in all directions