Theory of Consumer Behaviour Test 2.3

The shape of the Budget Line is ....

• upward sloping

• vertical straight line

• downward sloping

• all of these

All the bundles on the budget line cost....

• more than consumer's income

• less than consumer's income

• exactly equal to consumer's income

• All the above

Budget Line is represented by

• (p1x1) + (p2x2) = M

• (p1x1) + (p2x2) ≤ M

• (p1x1) + (p2x2) >M

The slope of Budget line is given by

• 1) relative price

• 2) absolute price

• 3) -(Px/Py)

• 4) both option (1) &( 3)

Slope of Budget line is a

• neutral value

• positive value

• ngative value

• none of the above

If price of good 2 is Rs.20 and price of good 1 is Rs.10.Income of the consumer is Rs.100. What is Horizontal intercept ?

(a)  

If the price of good 1 is Rs.20 and price of good 2 is Rs.5, the slope of budget line is (a)  

Any point below the budget line represents a bundle which costs less than consumer's income

• False

• True

• None of these

If price of good 1 is Rs.8,Price of good 2 is Rs.5 and Consumer's income is Rs.40,write Budget Line Equation

(a)  

If P1 =4, P2 =5 and M=20, Find Vertical Intercept.

(a)