Question 1

As per indifference curve analysis consumer equilibrium is attained when

Accepted Answer

A) slope of indifference curve is constant 
B) slopes of both indifference curve and income price line are equal 
C) slopes of both indifference curve and income price line are opposite 
D) both income price line and indifference curve are parallel. 
A) slope of indifference curve is constant 
B) slopes of both indifference curve and income price line are equal 
C) slopes of both indifference curve and income price line are opposite 
D) both income price line and indifference curve are parallel. B

Question 2

If negative income effect is greater than positive substitution effect : the product will be

Accepted Answer

A) a normal good 
B) an inferior good 
C) a giffen good 
D) a complementary good 
A) a normal good 
B) an inferior good 
C) a giffen good 
D) a complementary good C

Question 3

According to Marshall consumer surplus is:

Accepted Answer

A) total utility - marginal utility 
B) total utility + marginal utility 
C) total utility derived - price 
D) price - marginal utility 
A) total utility - marginal utility 
B) total utility + marginal utility 
C) total utility derived - price 
D) price - marginal utility C

Question 4

Which of the following statement is TRUE with regard to total utility

Accepted Answer

A) total utility is the utility derived from last unit 
B) total utility increases at a diminishing range 
C) as consumption increases total utility goes on diminishing 
D) at saturation point total utility is negative 
A) total utility is the utility derived from last unit 
B) total utility increases at a diminishing range 
C) as consumption increases total utility goes on diminishing 
D) at saturation point total utility is negative

Question 5

Strong ordering means

Accepted Answer

A) absence of indifference 
B) presence of indifference 
C) no difference between different combinations 
D) none of the above 
A) absence of indifference 
B) presence of indifference 
C) no difference between different combinations 
D) none of the above

Question 6

The income effect for a commodity is

Accepted Answer

A) is always positive 
B) is always negative 
C) depends upon price effect 
D) determines the nature of the commodity 
A) is always positive 
B) is always negative 
C) depends upon price effect 
D) determines the nature of the commodity

Question 7

Which of the following statements is true

Accepted Answer

A) hicksian substitution effect is greater than slutsky substitution effect 
B) slutsky substitution effect is greater than hicksian substitution effect 
C) hicksian substitution effect is same and equal to slutsky substitution effect 
D) hicksian substitution effect is the reverse of slutsky substitution effect 
A) hicksian substitution effect is greater than slutsky substitution effect 
B) slutsky substitution effect is greater than hicksian substitution effect 
C) hicksian substitution effect is same and equal to slutsky substitution effect 
D) hicksian substitution effect is the reverse of slutsky substitution effect

Question 8

For a giffen good, when price falls

Accepted Answer

A) demand increases at a faster rate 
B) demand decreases 
C) demand remains constant 
D) demand curve has a negative slope 
A) demand increases at a faster rate 
B) demand decreases 
C) demand remains constant 
D) demand curve has a negative slope

Question 9

Inferior goods are the goods with

Accepted Answer

A) falling income effect 
B) rising income effect 
C) negative income effect 
D) positive marshallian effects 
A) falling income effect 
B) rising income effect 
C) negative income effect 
D) positive marshallian effects

Question 10

If negative income effect is greater than positive substitution effect : price effect will be

Accepted Answer

A) zero 
B) negative 
C) positive 
D) positive and greater than one 
A) zero 
B) negative 
C) positive 
D) positive and greater than one

Question 11

Price effect is

Accepted Answer

A) income effect - substitution effect 
B) substitution effect - income effect 
C) income effect + substitution effect 
D) income effect + substitution effect- negative effects 
A) income effect - substitution effect 
B) substitution effect - income effect 
C) income effect + substitution effect 
D) income effect + substitution effect- negative effects

Question 12

Which of the following is called gossans first law

Accepted Answer

A) law of substitution 
B) law of equi marginal utility 
C) law of diminishing marginal utility 
D) none of the above 
A) law of substitution 
B) law of equi marginal utility 
C) law of diminishing marginal utility 
D) none of the above

Question 13

When individuals income falls (everything remain the same) his demand for an inferior good

Accepted Answer

A) rises 
B) falls 
C) remains the same 
D) we cannot say without additional information 
A) rises 
B) falls 
C) remains the same 
D) we cannot say without additional information

Question 14

Indifference curves are

Accepted Answer

A) always parallel 
B) may be parallel 
C) may not be parallel 
D) both b and c 
A) always parallel 
B) may be parallel 
C) may not be parallel 
D) both b and c

Question 15

Which of the following statement is FALSE with regard to marginal utility

Accepted Answer

A) marginal utility is the utility derived from last unit 
B) as consumption increases marginal utility goes on diminishing 
C) at saturation point marginal utility is zero 
D) marginal utility increases at a diminishing range 
A) marginal utility is the utility derived from last unit 
B) as consumption increases marginal utility goes on diminishing 
C) at saturation point marginal utility is zero 
D) marginal utility increases at a diminishing range

Question 16

If negative income effect is less than positive substitution effect : the product will be

Accepted Answer

A) a normal good 
B) an inferior good 
C) a giffen good 
D) a complementary good 
A) a normal good 
B) an inferior good 
C) a giffen good 
D) a complementary good

Question 17

The slope of a budget line throughout its length is

Accepted Answer

A) the satisfaction level of both the commodities 
B) the income level of the consumer 
C) the price ratio of both the commodities under consideration 
D) price level of a country 
A) the satisfaction level of both the commodities 
B) the income level of the consumer 
C) the price ratio of both the commodities under consideration 
D) price level of a country

Question 18

The slope of a budget line is

Accepted Answer

A) the satisfaction level of both the commodities 
B) the income level of the consumer 
C) the price ratio of both the commodities under consideration 
D) price level of a country 
A) the satisfaction level of both the commodities 
B) the income level of the consumer 
C) the price ratio of both the commodities under consideration 
D) price level of a country

Question 19

According to Hicks substitution effect is

Accepted Answer

A) the movement to a higher indifference curve 
B) the movement to a lower indifference curve 
C) the movement along an indifference curve 
D) the movement to a decreased consumption 
A) the movement to a higher indifference curve 
B) the movement to a lower indifference curve 
C) the movement along an indifference curve 
D) the movement to a decreased consumption

Question 20

In the fundamental theorem of consumption and to prove the law of demand, Samualson uses

Accepted Answer

A) compensating variation in income 
B) the cost difference 
C) the over compensation effect 
D) substituting variation in price 
A) compensating variation in income 
B) the cost difference 
C) the over compensation effect 
D) substituting variation in price

As per indifference curve analysis consumer equilibrium is attained when

If negative income effect is greater than positive substitution effect : the product will be

According to Marshall consumer surplus is:

Which of the following statement is TRUE with regard to total utility

Strong ordering means

The income effect for a commodity is

Which of the following statements is true

For a giffen good, when price falls

Inferior goods are the goods with

If negative income effect is greater than positive substitution effect : price effect will be

Price effect is

Which of the following is called gossans first law

When individuals income falls (everything remain the same) his demand for an inferior good

Indifference curves are

Which of the following statement is FALSE with regard to marginal utility

If negative income effect is less than positive substitution effect : the product will be

The slope of a budget line throughout its length is

The slope of a budget line is

According to Hicks substitution effect is

In the fundamental theorem of consumption and to prove the law of demand, Samualson uses

Indifference Curve Analysis and Consumer Theory

Cost Theory and Production Possibility Curve Analysis

Classical Economic Theory

Macroeconomic Theory and Models

Macroeconomic Equilibrium and Concepts

Keynesian Economics and Related Concepts

National Income and Keynesian Economics

Economics and Economic Theory

Economic Concepts and Theories

Macroeconomics and Economic Theories

Economics and Economic Methods

Economics and Social Science

Production and Costs

Demand Analysis and Utility Theory

Indifference Curves, Ordering, Wealth of Nations, and More

Economics Questions on Demand and Supply

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Exam 1: Consumer Theory and Utility

As per indifference curve analysis consumer equilibrium is attained when

If negative income effect is greater than positive substitution effect : the product will be

According to Marshall consumer surplus is:

Which of the following statement is TRUE with regard to total utility

Strong ordering means

The income effect for a commodity is

Which of the following statements is true

For a giffen good, when price falls

Inferior goods are the goods with

If negative income effect is greater than positive substitution effect : price effect will be

Price effect is

Which of the following is called gossans first law

When individuals income falls (everything remain the same) his demand for an inferior good

Indifference curves are

Which of the following statement is FALSE with regard to marginal utility

If negative income effect is less than positive substitution effect : the product will be

The slope of a budget line throughout its length is

The slope of a budget line is

According to Hicks substitution effect is

In the fundamental theorem of consumption and to prove the law of demand, Samualson uses

Indifference Curve Analysis and Consumer Theory

Cost Theory and Production Possibility Curve Analysis

Classical Economic Theory

Macroeconomic Theory and Models

Macroeconomic Equilibrium and Concepts

Keynesian Economics and Related Concepts

National Income and Keynesian Economics

Economics and Economic Theory

Economic Concepts and Theories

Macroeconomics and Economic Theories

Economics and Economic Methods

Economics and Social Science

Production and Costs

Demand Analysis and Utility Theory

Indifference Curves, Ordering, Wealth of Nations, and More

Economics Questions on Demand and Supply

Elasticity of Supply and Demand

Filters