Question 1

'Higher the indifference curve higher will be level of satisfaction'. The statement is

Accepted Answer

A) always true 
B) always false 
C) sometimes true and sometimes false 
D) true only if price effect is positive

Question 2

Marshalian cardinal utility analysis assumes

Accepted Answer

A) marginal utility of money is zero 
B) marginal utility of money is decreasing 
C) marginal utility of money is increasing 
D) marginal utility of money is constant

Question 3

Income consumption curve of an inferior commodity is

Accepted Answer

A) positively sloped 
B) backward bending 
C) downward slopping straight line 
D) showing constant income effect

Question 4

When price of a product falls, more of it is purchased because of

Accepted Answer

A) the substitution effect 
B) the income effect 
C) neither substitution effect nor income effect 
D) both the substitution and income effects

Exam 2: Indifference Curve Analysis and Consumer Theory

'Higher the indifference curve higher will be level of satisfaction'. The statement is

Marshalian cardinal utility analysis assumes

Income consumption curve of an inferior commodity is

When price of a product falls, more of it is purchased because of