Economics Quiz Questions And Answers – Chapter 2 – Theory of Consumer Behaviour

Economics Quiz Questions And Answers, which are covered in this chapter, relate to the topic , Theory of Consumer Behaviour Introduction to Micro Economics. Economics Quiz Questions And Answers Test contains 20 questions. Answers to Economics MCQs are available after clicking on the answer.

1._____ shows various combinations of two products that give same amount of satisfaction:

(a) ISO cost curve

(b) Indifference curve

(c) Marginal utility curve

(d) ISO quant

Answer

Answer: (b) Indifference curve


 

2.Total utility is maximum when :

(a) Marginal utility is maximum

(b) Marginal utility is Zero

(c) Average utility is maximum

(d) Average utility is Zero

Answer

Answer: (b) Marginal utility is Zero


 

3.An indifference curve is always :

(a) Concave to the origin

(b) Convex to the origin

(c) L-shaped

(d) A vertical straight line

Answer

Answer: (b) Convex to the origin


 

4.Marginal utility curve of a consumer is also his:

(a) Indifference curve

(b) Total utility curve

(c) Supply curve

(d) Demand curve

Answer

Answer: (d) Demand curve





5.At equilibrium, the slope of the indifference curve is:

(a) Equal to the slope of budget line

(b) Greater than the slope of budget line

(c) Smaller than the slope of budget line

(d) None

Answer

Answer: (a) Equal to the slope of budget line


 

Economics Quiz Questions And Answers – Theory of Consumer Behaviour

6.The law of equi marginal utility considers price of money as:

(a) zero

(b) less than one

(c) more than one

(d) one

Answer

Answer: (d) one


 

7.Marginal utility approach was given by:

(a) J.R. hicks

(b) Alfred Marshall

(c) Robbins

(d) A.C. Pigou

Answer

Answer: (b) Alfred Marshall


 

8.Indifference curves between income and leisure for an individual are generally:

(a) Concave to the origin

(b) Convex to the origin

(c) Negatively sloped straight lines

(d) Positively sloped straight lines

Answer

Answer: (d) Positively sloped straight lines


 

9.In case of a right angled indifference curve the goods are:

(a) Perfect complements

(b) Perfect substitutes

(c) Inferior goods

(d) Giffen good

Answer

Answer: (A) Perfect complements





10.Indifference curves never intersect each other due to:

(a) Different levels of satisfaction

(b) Same levels of satisfaction

(c) Convex to origin

(d) Concave to origin

Answer

Answer: (a) Different levels of satisfaction


 

Economics Quiz Questions And Answers – Theory of Consumer Behaviour

11.The convexity of indifference curve is due to _______ :

(a) Declining marginal rate of substitution

(b) Rising marginal rate of substitution

(c) Constant marginal rate of substitution

(d) None of the above.

Answer

Answer: (a) Declining marginal rate of substitution


 

12.When two goods are perfect complementary, the indifference curve is:

(a) A straight line

(b) U-shaped

(c) L-shaped

(d) Circular in shape.

Answer

Answer: (A) A straight line


 

13.Marshallian utility analysis is known as_______.

(a) Cardinal

(b) Ordinal

(c) Classical

(d) Historical.

Answer

Answer: (A) Cardinal


 

14.When marginal Rate of Substitution is increasing, the shape of Indifference curve:

(a) Horizontal

(b) Vertical

(c) Concave

(d) Convex.

Answer

Answer: (c) Concave





15.Cardinal approach is related to:

(a) Indifference curve

(b) Equi-marginal utility

(c) Law of diminishing returns.

(d) None of these.

Answer

Answer: (b) Equi-marginal utility


 

Economics Quiz Questions And Answers – Theory of Consumer Behaviour

16.The substitution effect of fall in the price of the commodity will lead to:

(a) Upward movement in indifference curve

(b) Downward movement in indifference curve

(c) Movement from lower IC to a higher one

(d) None.

Answer

Answer: (c) Movement from lower IC to a higher one


 

17.The satisfaction which a consumer derives in the consumption of a commodity is equal to ` 320. The price of that commodity is ` 180. What will be his consumer surplus ?

(a) 180.

(b) 200.

(c) 140.

(d) 500

Answer

Answer: (c) 140


 

18.The law of equi marginal utility is one of the laws within whose parameters Marginal Utility Analysis is framed. The other one is:

(a) Law of diminishing marginal utility.

(b) Law of proportions.

(c) Law of consumer surplus

(d) Law of increasing returns.

Answer

Answer: (a) Law of diminishing marginal utility.


 

19.When indifference curve is L shaped then two goods will be _____:

(a) Complementary goods.

(b) Substitute goods.

(c) Perfect substitute goods.

(d) Perfect complementary goods.

Answer

Answer: (d) Perfect complementary goods.


 

20.On which approach, indifference curve analysis is based?

(a) Cardinal approach.

(b) Ordinal approach.

(c) Cardinal and ordinal both.

(d) None of the above.

Answer

Answer:  (b) Ordinal approach.

 


 

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