Important MCQs of Consumer’s Equilibrium Microeconomics Class 11

Share your love

Looking for important MCQs of Consumers Equilibrium chapter of Microeconomics with answers and solutions class 11 CBSE, ISC, and State Board

Multiple Choice Questions with answers of Consumers Equilibrium chapter class 11 Microeconomics

Let’s Practice

Which of these is a property of the indifference curve?

a) Indifference curve slopes downwards
b) Indifference curve is concave to the origin
c) Indifference curve is convex to the origin
d) Higher indifference curve represents a higher level of satisfaction

Ans – a), C, d)

Indifference Curves are convex to the origin because of:

a) Increasing MRS
b) Diminishing MRS
c) Law of Diminishing Marginal Utility
d) Lw of Equi-Marginal Utility

Ans – b)

The necessary condition under the utility approach to attain consumers equilibrium in the case of two commodities is:

a) MUx/Px = MUy/Py
b) MRSx = Px/Py
c) MUx = Px
d) None of these

Ans – a)

When we add up utility derived from the consumption of all the units of the commodities, we get:

a) Total Utility
b) Initial Utility
c) Marginal Utility
d) None of these

Ans – a)

Marginal Utility (MU) in terms of money is equal to:

a) Marginal Utility in utils/ Marginal Utility of one rupee
b) Marginal Utility of one rupee/Marginal Utility in utils
c) Marginal Utility in utils/Price of the commodity
d) None of these

Ans – a)

According to the Law of diminishing marginal utility, satisfaction is obtained from the consumption of each successive unit:

a) Increase
b) Decrease
c) Remains same
d) Either increases or decreases

Ans – b)

Indifference Map refers to:

a) Highest Indifference curve
b) Lowest Indifference curve
c) Family of Indifference curves
d) None fo these

Ans – c)

The budget set includes:

a) All those combinations of two goods that a consumer already possesses
b) All those combinations of two goods that a consumer can not afford
c) All those combinations of two goods that a consumer is willing to buy
d) All those combinations of two goods that a consumer can afford

Ans – d)

Indifference curves are:

a) Concave to the origin
b) Convex to the origin
c) Upward sloping straight line passing from the origin
d) None of these

Ans – b)

Which of these is a condition for consumers’ equilibrium by indifference curve analysis?

a) MUx = Px
b) MUx/Px = MUy/Py
c) MRSx = Px/Py
d) MUx = MUy

Ans – c)

If MUx/Px > MUy/Py, then to reach the equilibrium position, a consumer should:

a) Stop buying any commodity
b) Buy both the commodities in equal quantity
c) Buy more of X and less of Y
d) Buy more of Y and less of X

Ans – c)

If the consumption of an additional unit of a commodity causes no change in TU, then the resultant MU is

a) Zero
b) Positive
c) Negative
d) Constant

Ans – a)

An indifference curve is best described as a series of points that show:

a) Combinations of two commodities that give the consumer the same satisfaction.
b) Combinations of two goods, such that the cost of each combination is equal to the money income of the consumer
c) Combinations of the two goods which a consumer can afford, given his income and prices in the market
d) None of these

Ans – a)

Total Utility is __ at the point of satiety.

a) Minimum
b) Maximum
c) Zero
d) None of these

Ans – b)

Marginal Utility (MU) of nth unit is calcualted as:

a) MUn = TUn = TUn+1
b) MUn = TUn + TUn+1
c) MUn = TUn + TUn+1
d) MUn = TUn – TUn-1

Ans – d)

In the case of a single commodity, consumer’s equilibrium is achieved when:

a) MUx > Px
b) MUx < Px
c) MUx ≠ Px
d) MUx = Px

Ans – d)

_________ measures the slope of the indifference curve.

a) Budget Line
b) Marginal Rate of Substitution
c) Marginal Rate of Transformation
d) None of these

Ans – b)

How is TU derived from MU?

a) TU = ΣMU
b) TU = U1 + U2 + U3——+ Un
c) TUn = MUn + MUn-1
d) TUn = MUn – MUn-1

Ans – a), b)

What happens to MU when TU is maximum?

a) MU is negative
b) MU is Zero
c) MU is decreasing
d) MU is increasing

Ans – b)

An indifference curve always:

a) Slopes downwards from left to right
b) Slopes upwards from left to right
c) Ix parallel to the Y-axis
d) Is parallel to the X-axis

Ans – a)

In the case of the cardinal utility approach, utility is measured in :

a) Rupees
b) Ranks
c) Utils
d) None of these

Ans – c)

The consumer will be in equilibrium where there is tangency between price line and indifference curve because at this point:

a) MRS< Price Ratio b) MRS>Price Ratio
c) MRS = Price Ratio
d) Slope of Indifference Curve = Slope of Budget Line

Ans – c), d)

“Cardinality” means utility can be:

a) Measured
b) Ranked
c) Not Measured
d) None of these

Ans – a)

The slope of the price line (in case of commodity X and Y) is given by:

a) Taste and Preferences of consumer
b) Prices of both the commodities
c) Price of commodity X alone
d) Price of Commodity Y alone

Ans – b)

Which Law states that: “When a consumer consumers more and more units of a product, the utility derived from each additional unit decreases”?

a) Law of Equi-Marginal Utility
b) Fundamental Law of Satisfaction
c) Law of Cardinal Utility
d) Law of Diminishing Marginal Utility

Ans – b), d)

In the context of Indifference Curve Analysis, MRS stands for:

a) Marginal Rate of Substitution
b) Marginal Rate of Satisfaction
c) Marginal Return of Substitution
d) Marginal Return of Satisfaction

Ans – a)

For consumer’s equilibrium to be stable, the requirement is:

a) Constant MRS
b) Increasing MRS
c) Diminishing MRS
d) None of these

Ans – c)

The total utility derived by Shyam by eating 6 apples is 300 utils. The marginal Utility of the 7th apple is 30 utils. The total utility for 7 apples will be __ utils.

a) 330
b) 270
c) 300
d) 30

Ans – a)

The assumption of “Constant Marginal Utility of Money” means that the importance of money to consumers is:

a) Increasing
b) Decreasing
c) Same
d) None of these

Ans – c)

When Economists speak of the utility of a certain product, they are referring to:

a) Demand for the product
b) Usefulness of the product in consumption
c) satisfaction gained from consuming such product
d) Rate at which consumers are willing to exchange one good for another

Ans – c)

Utility:

a) Differs from person to person
b) Differs from time to time
c) Can be easily measured
d) All of these

Ans – a), b)

A consumer in consumption of two commodities A and B is at equilibrium. The prices of A and B are ₹10 and ₹20 respectively and the marginal utility of product B is 50> What will be the marginal utility of product A?

a) 100
b) 25
c) 250
d) 4

Ans – b)

The Law of Diminishing Marginal utility will not hold good if the income of the consumer:

a) Increases
b) Decreases
c) Remains Constant
d) Either a) or b)

Ans – d)

As per Ordinal Approach:

a) Measurement of Utility is not possible through money
b) Measurement of Utility is possible but it can not be ranked
c) Measurement of Utility is not possible in cardinal numbers but it can be ranked
d) Ordinal utility is the utility expressed in ranks

Ans – c), d)

Marginal Utility:

a) Is always positive
b) Is always negative
c) Can be positive or negative but not Zero
d) Can be positive or negative or zero

Ans – d)

Mollie derives a total utility of 10 utils after having 4 mangoes and the total utility on consuming 5 mangoes is 9. What is her marginal utility for the 5th mango?

a) +1 util
b) 0 util
c) -1 util
d) 9 util

Ans – c)

After reaching the point of satiety, consumption of additional units of the commodity cause:

a) TU falls and MU increases
b) Both TU and MU increase
c) TU falls and MU falls and becomes negative
d) TU becomes negative and MU falls

Ans – c)

According to one of the assumptions of the Law of Diminishing Marginal Utility, there should be ________ between the consumption of one unit and another unit.

a) Equal time gap
b) No time gap
c) the Longtime gap
d) Any of these

Ans – b)

The budget line shows:

a) Possible combination of two goods that a consumer can buy spending his entire income at the given prices.
b) Possible combination of two goods which cost less than or equal to consumers money income
c) Possible combination of two goods among which the consumer is indifferent
d) All the these

Ans – a)

MUx of X is 40 and MUy of Y is 30. If the price of Y is ₹9, then the price of X at equilibrium will be _______.

a) ₹9
b) ₹30
c) ₹15
d) ₹12

Ans – d)

The farther the Indifference Curve is from the origin, then:

a) Higher is the satisfaction level
b) Lower is the satisfaction level
c) Same satisfaction level will be obtained
d) Nothing can be said about the satisfaction

Ans – a)

The consumer is in equilibrium when Marginal Utility from a Commodity equals:

a) Demand for the Commodity
b) Supply of that commodity
c) Price of the Commodity
d) All of these

Ans – c)

An Indifference Curve represents all those combinations of two goods which give:

a) No satisfaction to the consumer
b) Lower satisfaction to the consumer
c) Higher satisfaction to the consumer
d) Equal satisfaction to the consumer

Ans – d)

The consumer is in equilibrium at a point where the budget line:

a) Is above an indifference curve
b) Is below an indifference curve
c) Is tangent to an indifference curve
d) Cuts an indifference curve

Ans – c)

If the Marginal Rate of Substitution is constant throughout, the Indifference curve will be:

a) Parallel to the X-axis
b) Downward sloping concave
c) Downward sloping convex
d) Downward sloping straight line

Ans – d)

If the Marginal Rate of Substitution is increasing throughout, the Indifference Curve will be:

a) Downward sloping convex
b) Downward Sloping concave
c) Can shift both upwards or downwards
d) Does not shift

Ans – d)

A consumer consumes only two goods X and Y both priced at ₹ 4 per unit. If the consumer chooses a combination of these two goods with Marginal Rate of Substitution equal to 4, then the consumer will:

a) Buy more units of X
b) Buy more units of Y
c) Buy more units of both, X and Y
d) Buy less units of both, X and Y

Ans – a)

A consumer consumes only two goods X and Y whose prices are ₹3 and ₹4 per unit respectively. If the consumer chooses a combination of the two goods with the marginal utility of X equal to 4 and that of Y equal to 3, is the consumer in equilibrium, 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 both, X and Y

Ans – c)

Marginal utility is:

a) the utility from the first unit of a commodity consumed
b) the utility from the last unit consumed
c) total utility divided by the number of units consumed
d) always positive

Ans – b)

Total utility is ________ .

a) the sum of marginal utilities
b) utility from the first unit × number of units consumed
c) always increasing
d) utility from last unit × number of units consumed

Ans – a)

Which of the following can be referred to as ‘point of satiety’.

a) Marginal Utility is negative
b) Marginal utility is zero
c) Total utility is rising
d) Total Utility is falling

Ans – b)

At the Point of Satiety:

a) MU is negative
b) MU Is Zero
c) MU is rising
d) None of these

Ans – b)

A consumer consumes only two goods. If the price of one of the goods falls, the indifference curve:

a) Shifts leftward
b) Shifts rightward
c) can shift both leftward and rightward
d) Does not shift

Ans – d)

The slope of an Indifference Curve is measured by:

a) Marginal Rate of Substitution
b) Marginal Rate of Transformation
c) Marginal Opportunity Cost
d) None of these

Ans – a)

If MUy = 20; MUx = 60; Price of Y = ₹4, then what will be the price of X at Equilibrium:

a) ₹14
b) ₹3
c) ₹12
d) ₹4

Ans – c)

Market Rate of Exchange also denotes:

a) Slope of PPC
b) Slope of Budget Line
c) Slope of indifference curve
d) None of these

Ans – b)

When Marginal Utility is zero, total utility is:

a) Zero
b) Minimum
c) Maximum
d) Negative

Ans – c)

Suppose, Mayank consumes Burger and Garlic Bread. Which of the following bundle of Burger and Garlic Bread will Mayank choose if he has a monotonic preference?

a) Bundle A (5,7)
b) Bundle B (4,7)
c) Bundle C (5,6)
d) None of these

Ans – a)

Which of the following is a characteristic of utility?

a) Utility is subjective
b) utility is a relative concept
c) Utility is a Psychological phenomenon
d) All of these

Ans – d)

Which is the First Law of Gossen?

a) Law of Equi-marginal utility
b) Law of Diminishing Marginal Utility
c) Law of supply
d) Law of Demand

Ans – b)

Which of the following statement is not true?

a) As long as MU is positive, TU increases
b) TU is zero when MU is zero
c) TU starts decreasing when MU is negative
d) After the point of satiety, MU becomes negative

Ans – b)

Share your love
Default image
Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.

Articles: 2015

Leave a Reply

Your email address will not be published.

close

Ad Blocker Detected!

Our Website is made possible by displaying online advertisements to our visitors. Please consider supporting us and remove the AD - Blocker to read this article.

Refresh