Question 1

In the case of normal goods, the quantity demanded varies inversely with:

Accepted Answer

A) Price of good 
B) Income of the consumer 
C) Fashion of the good 
D) Savings

Question 2

A movement from one point to another along an indifference curve makes the satisfaction:

Accepted Answer

A) Increasing 
B) Decreasing 
C) Unaltered 
D) None

Question 3

If income effect works in the same direction to that of substitution effect, the good is a:

Accepted Answer

A) Normal good 
B) Inferior good 
C) Giffen good 
D) Superior Good

Question 4

As moving from left to right through an indifference curve, the MRS of X for Y

Accepted Answer

A) Increases 
B) Remains the same 
C) Decreases 
D) Both A and C

Question 5

In the case of an indifference curve

Accepted Answer

A) dU/dX>dU/dY 
B) dU/dX = dU/dY 
C) dU/dX<dU/dY 
D) dU/dX?dU/Dy

Exam 5: Demand Analysis and Utility Theory in Economics

In the case of normal goods, the quantity demanded varies inversely with: