Test: Theory Of Consumer Behaviour - 1


10 Questions MCQ Test NCERT Textbooks (Class 6 to Class 12) | Test: Theory Of Consumer Behaviour - 1


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QUESTION: 1

Which of the following statements regarding utility is not true?

Solution:

Utility can be measured cardinally according to Marshall, but according to Hicks (ordinal approach) we can rank our preferences so utility is not always measurable cardinally.

QUESTION: 2

Which of the following utility approach is based on the theory of Alfred Marshall?

Solution:
QUESTION: 3

_____________ is the addition to total utility by the consumption of one additional unit of the commodity?

Solution:

Marginal Utility or Marginal Satiety – is the additional utility derived from the consumption of an additional unit of a commodity. Therefore, Marginal Utility = the addition made to the Total Utility by consuming one more unit of a commodity.

QUESTION: 4

Which of the following utility approach suggests that utility is a measurable and quantifiable entity?

Solution:

The Cardinal Utility approach is propounded by neo-classical economists, who believe that utility is measurable, and the customer can express his satisfaction in cardinal or quantitative numbers, such as 1,2,3, and so on.The neo-classical economist developed the theory of consumption based on the assumption that utility is measurable and can be expressed cardinally. And to do so, they have introduced a hypothetical unit called as “Utils” meaning the units of utility. Here, one Util is equivalent to one rupee and the utility of money remains constant.

QUESTION: 5

____________ shows various combinations of two goods that give same amount of satisfaction to the consumer?

Solution:

An indifference curve is a graph that shows a combination of two goods that give a consumer equal satisfaction and utility, thereby making the consumer indifferent. Indifference curves are heuristic devices used in contemporary microeconomics to demonstrate consumer preference and the limitations of a budget. Recent economists have adopted the principles of indifference curves in the study of welfare economics.

QUESTION: 6

In case of relatively more elastic, demand curve is:

Solution:
QUESTION: 7

 _____________ is defined as the difference between what the consumer is willing to pay for a product and what he actually pays?

Solution:

The consumer surplus is the difference between the highest price a consumer is willing to pay and the actual market price of the good. The producer surplus is the difference between the market price and the lowest price a producer would be willing to accept. For producers, a surplus can be thought of as profit, because producers usually don't want to produce at a loss. The two together create an economic surplus.

QUESTION: 8

According to the law of diminishing marginal utility, _________?

Solution:
QUESTION: 9

The want satisfying power of a commodity is known as:

Solution:

The want satisfying power of a commodity is called utility. It is a quality possessed by a commodity or service to satisfy human wants. Utility can also be defined as value-in-use of a commodity because the satisfaction which we get from the consumption of a commodity is its value-in-use.

QUESTION: 10

What is called point of satiety?

Solution:

Point of Satiety is defined as '' the point where marginal utility of any commodity is zero''. Thus it is a point where satisfaction of any commodity is zero.

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