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Class 11 Economics MCQ Chapter 10 Theory of Consumer Behaviour
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Theory of Consumer Behaviour
Chapter: 10
PART – (B) INTRODUCTORY MACROECONOMICS
| MCQ |
1. Which of the following statements regarding utility is not true?
(a) It is purely a subjective entity.
(b) It is a satisfying power of a commodity.
(c) It helps consumers to make choices.
(d) Utility is always measurable.
Ans: (d) Utility is always measurable.
2. Which is the First Law of Gossen?
(a) Law of Demand.
(b) Law of Diminishing Marginal Utility.
(c) Law of Equi-marginal Utility.
(d) Consumer’s Surplus.
Ans: (b) Law of Diminishing Marginal Utility.
3. The shape of the total utility curve is:
(a) It always increases.
(b) It initially decreases and then increases.
(c) It always decreases.
(d) It initially increases at an increasing rate, then increases at a decreasing rate, and eventually decreases after reaching its maximum.
Ans: (d) It initially increases at an increasing rate, then increases at a decreasing rate, and eventually decreases after reaching its maximum.
4. MU of a commodity becomes negative when TU of that commodity is:
(a) Rising.
(b) Constant.
(c) Falling.
(d) Zero.
Ans: (c) Falling.
5. As long as MU is positive, TU:
(a) Remains constant.
(b) Increases.
(c) Falls.
(d) All of these.
Ans: (b) Increases.
6. When TU becomes maximum, MU is:
(a) Positive.
(b) Negative.
(c) Zero.
(d) None of these.
Ans: (c) Zero.
7. Saturation point means:
(a) TU is rising, and MU is falling.
(b) TU is falling and MU is negative.
(c) TU is maximum and MU is zero.
(d) Falling MU curve.
Ans: (c) TU is maximum and MU is zero.
8. The equation of budget line is:
(a) P₁x₁ + P₂x₂ = M
(b) P₁x₁+ P₂x₂ ≤ M
(c) P₁x₁ + P₂x₂ ≥ M
(d) None of these.
Ans: (a) P₁x₁ + P₂x₂ = M
9. The slope of the budget line represents:
(a) Marginal opportunity cost.
(b) Marginal rate of substitution.
(c) Market rate of exchange.
(d) None of these.
Ans: (c) Market rate of exchange.
10. Diminishing Marginal Rate of Substitution (MRS) implies that:
(a) A consumer wants to give up lesser units of good Y in exchange for good X.
(b) A consumer wants to give up more units of good Y in exchange for good X.
(c) A consumer wants to give up the same units of good Y in exchange for good X.
(d) None of the above.
Ans: (a) A consumer wants to give up lesser units of good Y in exchange for good X.
11. Who basically propounded the concept of Law of Equimarginal Utility ?
(a) Marshall.
(b) Gossen.
(c) Ricardo.
(d) J. S. Mill.
Ans: (c) Ricardo.
12. A movement along a given indifference curve is known as:
(a) Price effect.
(b) Substitution effect.
(c) Income effect.
(d) None of the above.
Ans: (b) Substitution effect.
13. What does the demand curve typically show?
(a) The direct relationship between price and quantity demanded.
(b) The inverse relationship between price and quantity demanded.
(c) The constant demand irrespective of price.
(d) None of the above.
Ans: (b) The inverse relationship between price and quantity demanded.
14. A straight downward sloping indifference curve means:
(a) MRS is constant.
(b) MRS is increasing.
(c) MRS is decreasing.
(d) MRS is zero.
Ans: (a) MRS is constant.
15. If 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) Downward sloping straight line.
