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Test: Theory Of Consumer Behaviour - 4 - Commerce MCQ


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25 Questions MCQ Test Economics Class 11 - Test: Theory Of Consumer Behaviour - 4

Test: Theory Of Consumer Behaviour - 4 for Commerce 2024 is part of Economics Class 11 preparation. The Test: Theory Of Consumer Behaviour - 4 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Theory Of Consumer Behaviour - 4 MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Theory Of Consumer Behaviour - 4 below.
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Test: Theory Of Consumer Behaviour - 4 - Question 1

At what point does total utility starts diminishing?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 1

MU is addition to TU when an MU becomes -ive TU falls.

Test: Theory Of Consumer Behaviour - 4 - Question 2

Total utility curve:

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 2

First rises till MU is positive, then reaches its maximum when MU=0,then starts falling when MU becomes negitive.

Test: Theory Of Consumer Behaviour - 4 - Question 3

Total utility is maximum when?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 3

TU,   First rises till MU is positive, then reaches its maximum when MU=0,then starts falling when MU becomes negitive.

Test: Theory Of Consumer Behaviour - 4 - Question 4

the slope of priceline throughout its length?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 4

slope of price line is given by ratio of the prices of two goods, i.e. Px/Py, which is constant.

Test: Theory Of Consumer Behaviour - 4 - Question 5

Which of the following is not true?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 5

Which of the following is not true?


Indifference curves cannot intersect each other

Two indifference curve can be tangent to each other

Indifference curves are convex to the origin

Indifference curves slopes downward to the right

Explanation:

The indifference curves cannot intersect each other. It is because at the point of tangency, the higher curve will give as much as of the two commodities as is given by the lower indifference curve. This is absurd and impossible.

Test: Theory Of Consumer Behaviour - 4 - Question 6

Which of the following assumption is not necessary for the cardinal utility theory?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 6

Approch is for an individual consumer, market has nothing to do with it.

Test: Theory Of Consumer Behaviour - 4 - Question 7

The doctrine of consumer’s surplus is based on?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 7

The theory of consumer's surplus is based on the law of diminishing marginal utility. The law of diminishing marginal utility claims that as you consumer more of a commodity, the marginal utility derived from it decreases eventually.a

Test: Theory Of Consumer Behaviour - 4 - Question 8

When the total utility is increasing at an increasing rate, marginal utility is __________?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 8

The correct option is D.

Total utility refers to the total satisfaction obtained from the consumption of all  possible units of a commodity. Marginal utility is the additional utility derived from the consumption of one more unit of the given commodity. MU=TUn-TUn-1.So when TU is increasing at an increases this means utility derived from each unit is increasing. This means marginal utility is increasing. 

Test: Theory Of Consumer Behaviour - 4 - Question 9

At the saturation point of commodity X, the MUx is?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 9

Saturation Point: The point where the desire to consume the same product anymore becomes zero.

hence additional consumption will not give any satisfaction to consumer,MU = 0

Test: Theory Of Consumer Behaviour - 4 - Question 10

A curve which first moves upwards then downwards is__________?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 10

 

MU is the rate of change of TU.

When the MU decreases, TU increases at decreasing rate.

When MU becomes zero, TU is maximum. It is a saturation point.

When MU becomes negative, TU declines

Test: Theory Of Consumer Behaviour - 4 - Question 11

Which of the following is one of the assumptions of the indifference curve analysis?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 11

The ordinal utility theory or the indifference curve analysis is based on four main assumptions.

Rational behavior of the consumer.

Utility is ordinal.

Diminishing marginal rate of substitution.

Consistency in choice. 

Test: Theory Of Consumer Behaviour - 4 - Question 12

At the point of tangency the slope of the indifference curve is ___________?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 12

At point of tagency MRE=MRS.

Test: Theory Of Consumer Behaviour - 4 - Question 13

A movement along a given indifference curve is known as?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 13

Consumer substitutes one good for other along IC in order to keep satisfaction level constant.

Test: Theory Of Consumer Behaviour - 4 - Question 14

Marginal utility curve of a given consumer is also his?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 14

The law of diminishing marginal utility states that marginal utility declines as consumption increases. Because demand price depends on the marginal utilityobtained from a good, price also declines as consumption increases, meaning price and quantity demanded are inversely related, which is the law of demand.

Test: Theory Of Consumer Behaviour - 4 - Question 15

Indifference curve depicts

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 15

An indifference curve is a graph showing combination of two goods that give the consumer equal satisfaction and utility. Each point on an indifference curveindicates that a consumer is indifferent between the two and all points give him the same utility.

Test: Theory Of Consumer Behaviour - 4 - Question 16

If two negatively sloped demand curves intersect then

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 16

flatter the curve more the elasticity,steeper the curve less the elasticity.

Test: Theory Of Consumer Behaviour - 4 - Question 17

If two negatively sloped demand curves intersect then elasticity of demand at the point of intersection will be

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 17

No. elasticity of demand will me more on a flatter curve than on the steeper curve because since price elasticity of demand = %change in /% change in price and hence in the flatter demand curve the change in price will be lesser which will mean that the change in Quantity will be divided by a smaller number.

Test: Theory Of Consumer Behaviour - 4 - Question 18

Which of the following will have inelastic demand?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 18

Demand for medicine is in-elastic as it falls in category of a necessity good.

Test: Theory Of Consumer Behaviour - 4 - Question 19

The value of elasticity in case of a horizontal line will be

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 19

price elasticity of demand = % change in quantity demanded / % change in price,

which tends to infinity in case of horizontal demand curve

Test: Theory Of Consumer Behaviour - 4 - Question 20

Which of the following will have elastic demand?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 20

It is only option of non-necessity/mandatory good among given options.

Test: Theory Of Consumer Behaviour - 4 - Question 21

What is the relationship between slope and the demand curve?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 21

The slope of a demand curve is ∆P/∆Q. If the price falls, we write -∆P/∆Q or if price rises demand falls, we write ∆P/∆Q.

Test: Theory Of Consumer Behaviour - 4 - Question 22

A rise in the income of the consumer leads to a fall in the demand for commodity ‘x’. What type of good is commodity ‘x’?

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 22

An inferior good is a type of good for which demand declines as the level of income increases.

Test: Theory Of Consumer Behaviour - 4 - Question 23

The substitute goods of a normal good are those that can be used

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 23

Substitute goods are those goods that can satisfy the same necessity, they can be used for the same end.

Test: Theory Of Consumer Behaviour - 4 - Question 24

One factor that causes a leftward shift of the demand curve out of the following is

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 24

leftward shift in the demand curve indicates a decrease in demand because consumers are purchasing fewer products for the same price.

Test: Theory Of Consumer Behaviour - 4 - Question 25

One factor that causes a movement along the demand curve of a commodity

Detailed Solution for Test: Theory Of Consumer Behaviour - 4 - Question 25

Movements along a demand curve happen only when the price of the good changes.

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