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Consumer Equilibrium

Total questions: 40

Worksheet time: 20mins

Name
Class
Date
1.
When MU is negative TU:- 
a)
Increases
b)
decreases
c)
Constant
d)
none of the above
2.
The slope of indifference curve is:- 
a)
Concave
b)
convex
c)
Straight line
d)
MRS
3.
The slope of budget line is:-
a)
concave
b)
convex
c)
MRS
d)
price ratio of the commodity
4.
Indifference mean:-
a)
x is preferred to y
b)
y is preferred to x
c)
x & y are equally preferred
d)
none of the above
5.
If the price of good x shown on x-axis falls then budget line will:-
a)
Shift to the right
b)
shift to the left
c)
Rotate to the right on the x axis
d)
rotate to the left on the x
6.
If the marginal rate of substitution (MRS) declines, then the indifference curve is:-
a)
concave to the origin
b)
straight line cutting both the axis
c)
convex to the origin
d)
none of the above
7.
Ordinal utility analysis was developed by:-
a)
J.R.Hicks & R.J.D. Allen
b)
Samualson
c)
Marshall and Jevons
d)
Slutsky
8.
A consumer reaches equilibrium when:- 
a)
Marginal utility is equal to price
b)
Marginal utility greater than price
c)
Marginal utility less than price
d)
Total utility is equal
9.

In one commodity case the marginal utility curve slopes downward from

a)

Right to left

b)

left to right

c)

Straight line

d)

None of the above

10.
 Indifference curve is a 
a)
Tabular Presentation
b)
Diagrammatic Presentation 
c)
Both A & B b
d)
None of the above
11.
 Indifference curve is a 
a)
Tabular Presentation
b)
Diagrammatic Presentation 
c)
Both A & B b
d)
None of the above
12.
 Indifference curve is a 
a)
Tabular Presentation
b)
Diagrammatic Presentation 
c)
Both A & B b
d)
None of the above
13.
 Indifference curve is a various combination of 
a)
  One commodity 
b)
Four commodities
c)
Three commodities 
d)
Two commodities
14.
  Indifference curve slopes downward from
a)
Left to right
b)
Right to left
c)
both of these
d)
none of these
15.
1.  Higher indifference curve represents 
a)
Lower level of satisfaction
b)
Medium level of satisfaction
c)
No satisfaction 
d)
Higher level of satisfaction
16.
Indifference map is the set of
a)
Indifference Set
b)
Both of these
c)
Indifference curve
d)
None of the Above
17.
In PPC, MOC 
a)
Decrease
b)
constant
c)
No movement
d)
Increases
18.

Normative Economics shows

a)

Actual economic situation

b)

Ideal economic situation

c)

What is?

d)

none of these

19.

Macro economics deals with

a)

Individual units

b)

Individual Demand

c)

Aggregative units

d)

all of these

20.
When Marginal Utility is zero what happens to Total Utility?
a)
Became Zero
b)
Became Maximum
c)
Became Minimum
d)
None of these
21.
When a consumer consumes two goods X and Y , she will attain equilibrium when
a)
MUx = MUy
b)
MUx/Px = MUy/Py
c)
Px/MUx = Py/MUy
d)
None of these
22.
When Total Utility Declines Marginal Utility
a)
Declines
b)
increases
c)
became zero
d)
became negative
23.
Want satisfying power of a commodity is called
a)
Utility
b)
Demand
c)
Consumers equilibrium
d)
None of these
24.
In which analysis Utility can be measured in numbers?
a)
Ordinal Analysis
b)
Cardinal Analysis
c)
Utility Analysis
d)
None of these
25.
When Price of Good-1 increases , other things remaining constant , the budget line will
a)
Pivot inward around the horizontal intercept
b)
Pivot outward around the horizontal intercept
c)
Pivot inward around the vertical intercept
d)
Pivot outward around the Vertical intercept
26.
When income of the Consumer decreases , the budget line
a)
Shifts rightward
b)
shifts leftward
c)
No change
d)
Rotates inward
27.
Slope of the Indifference Curve is 
a)
Price Ratio
b)
MRSxy
c)
MRTxy
d)
None of these
28.
Indifference Curve analysis of Consumer's equilibrium is also called
a)
Marshallian Anaysis
b)
Gossen's Analysis
c)
Hicks and Allen Analysis
d)
None of these
29.
The necessary condition in Indifference curve analysis for equilibrium is
a)
MUx = Px
b)
MUx/Px = MUy/Py
c)
MRSxy = - P1/P2
d)
MRSxy increases
30.
The necessary condition in Indifference curve analysis for equilibrium is
a)
MUx = Px
b)
MUx/Px = MUy/Py
c)
MRSxy = - P1/P2
d)
MRSxy increases
31.
When Marginal Utility is zero what happens to Total Utility?
a)
Became Zero
b)
Became Maximum
c)
Became Minimum
d)
None of these
32.

This graph shows a consumer's total utility from eating hamburgers in a single meal.


Which of the following characteristics of the TU function is explained by the law of diminishing marginal utility?

a)

the fact that the TU function slopes upward for some of the total utility curve

b)

the fact that TU function's slope starts steep but decreases until the 3rd hamburger and then becomes downward sloping

c)

the fact that the TU function starts at 0

d)

the fact that the TU function is always positive

e)

the fact that the TU depends on the quantity demanded

33.
Marginal utility is equal to which of the following
a)
total income divided by the price of the product
b)
the change in total utility from consuming one more unit of a good
c)
the satisfaction obtained from consuming any number of units of a good
d)
none of the above is correct
34.

With the increase in consumption by one unit of the commodity, TU increases from 150 to 180, then MU is

a)

50

b)

1.2

c)

30

d)

0.833

35.

The rate at which TU change in indicated by

a)

MU

b)

TU

c)

Both option 1&2

d)

None of the above

36.

Consumer equilibrium occurs when ...

a)

they have spent all of their income.

b)

a person consumes quantities of three goods.

c)

a person consumes quantities of two goods.

d)

satisfaction is maximised for a given level of income.

37.

Which of the shaded area in the diagrams below represents total utility?

a)
b)
c)
d)
38.

A consumer consumes only two goods X and Y whose prices are Rs 3 and Rs 4 respectively. If the consumer chooses a combination of the two goods with MU of X equal to 4 and that of Y equal of 3, then the consumer will______

a)

Buy more units of both X and Y

b)

Buy more units of Y and less of X

c)

Buy more units of X and less of Y

d)

Buy less units of the both, X and Y

39.

With the increase in consumption by one unit of the commodity, TU increases from 150 to 180, then MU is

a)

50

b)

1.2

c)

30

d)

0.833

40.
When a consumer consumes two goods X and Y , she will attain equilibrium when
a)
MUx = MUy
b)
MUx/Px = MUy/Py
c)
Px/MUx = Py/MUy
d)
None of these

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