IC ANALYSIS

Different points on an IC represent

• Different levels of satisfaction

• Same level of satisfaction

• Successively higher level of satisfaction

• Successively lower level of satisfaction

The shape of IC is

• Downward sloping concave

• Downward sloping convex

• Upward sloping concave

• Upward sloping convex

IC is downward sloping due to decrease in MRS

• True

• False

An IC will be concave to origin when MRS

• Decreases

• Increases

• Constant

• None of the above

An IC is a downward sloping straight line if MRT is

• Decreasing

• Increasing

• Constant

• None of the above

Different ICs represent

• Different levels of satisfaction

• Same level of satisfaction

ICs can intersect each other

• False

• True

The necessary condition of consumer equilibrium in ordinal approach is

• MRS must be decreasing

• MUx/Px = MUy/Py

• MRSxy = Px/Py

• MUx/MUy = Px /Py

Budget set is expressed

as

Px Qx + PyQy = M

• True

• False

Increase in income of a consumer will cause

• Rightward rotation of budget line

• Rightward shift of budget line

• Leftward shift of budget line

• Leftward rotation of budget line