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Multiple Choice Questions (MCQS), 1. Which of these is not a property of indifference curve?, (a) Indifference curve slopes downwards, (b) Indifference curve is concave to the origin, (c) Two indifference curves cannot intersect each other, (d) Higher indifference curve represents higher level of satisfaction., 2. Indifference curves are convex to the origin because of:, (a) Increasing MRS, (c) Law of Diminishing Marginal Utility, 3. The necessary condition under utility approach to attain consumer's equilibrium in case of tw, commodity is:, (b) Diminishing MRS, (d) Law of Equi-Marginal Utility, Px, (b) MRSX, Py, MUX MUY, (a), %3D, %D, Px, PY, (d) None of these, (c) MU, P, 4. When we add up utility derived from consumption of all the units of the commodities, we get:, (e) Total Utility, (c) Marginal Utility, 5. Marginal Utility (MU) in terms of money is equal to:, Marginal Utility in utils, (b) Initial utility, (d) None of these, (a), Marginal Utility of one rupee, Marginal Utility of one rupee, (b), Marginal Utility in utils, Marginal Utility in utils, (c), Price of the Commodity, (d) None of these

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2.37, Consumer's Equiibrium, A According to the Law of diminishing marginal utility, satisfaction obtained from consumption of each, successive unit:, (a) Increases, (c) Remains same, (b) Decreases, (d) Either increases or decreases, 7. Indifference Map refers to:, (a) Highest Indifference curve, (c) Family of indifference curves, (b) Lowest Indifference curve, (d) None of these, 8. Budget set includes:, (a) All those combinations of two goods which a consumer already possesses, h All those combinations of two goods which a consumer cannot afford, ic) All those combinations of two goods which a consumer is willing to buy, (d All those combinations of two goods which a consumer can afford, 9. Indifference cùrves are:, (a) Concave to the origin, (b) Convex to the origin, (c) Upward sloping straight line passing from the origin, (d) None of these, 10. Which of these is a condition for consumer's equilibrium by indifference curve analysis?, MUX MUY, (b), Px, (a) MU =, Px, Py, Px, (c) MRSX, Py, (d) MU, = MUy, %3!, MUX MUy, then to reach the equilibrium position, consumer should:, Py, 11. If, Px, (a) Stop buying any commodity., (c) Buy more of X and less of Y., (b) Buy both the commodities in equal quantity., (d) Buy more of Y and less of X., 12. If the consumption of an additional unit of a commodity causes no change in TU, then the resultant, MU is:, (b) Positive, (d) Constant, (a) Zero, (c) Negative, 13. An indifference curve is best described as a series of points which show:, (a) Combinations of two commodities which give the consumer same satisfaction., (b) Combinations of two goods, such that cost of each combination is equal to 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., 14. Total Utility is, at the point of satiety:, (a) Minimum, (c) Zero, 15. Marginal Utility (MU) of nh unit is calculated as:, (a) MU, =TU,-TU .1, (c) MU,=TU,+TU n-1, (b) Maximum, (d) None of these, (b) MU, = TU, + TU1, (d) MU, = TU,-TU-, %3D, %3D

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(d) Law of Diminishing Marginal Utility, 16. In case of single commodity, consumer's equilibrium is achieved when, (a) MU, > Px, (c) MUx Px, 2.38, (b) MUx < Px, (d) MUx Px, Consu, 27. In, (b) Marginal Rate of Substitution, measures the slope of indifference curve., 17., (d) None of these, (a) Budget Line, (c) Marginal Rate of Transformation, 18. In the following diagram of budget line, point "D" represents:, (a) Bundle which cost equal to money income of consumer, (b) Bundle which cost less than money income of consumer, (c) Bundle which cost greater than money income of consumer, (d) None of these, 28. F, (a, 29. T, 30. T, 10, 8., 31., 2, 123 4, Apples (A), 19. How is TU derived from MU?, 32., (a) TU = EMU, (c) Both (a) and (b), 20. What happens to MU when TU is maximum?, (a) MU is negative, (c) MU is decreasing, 21. An indifference curve always:, (a) Slopes downwards from left to right., (c) Is parallel to the Y-axis., 22. in case of cardinal utility approach, utility is measured in:, (a) Rupees, (c) Utils, 23. The consumer will be in equilibrium where there is tangency between price line and indifference, because at this point:, (a) MRS <Price Ratio, ic) MRS Price Ratio, 24. "Cardinality means utility can be:, (a) Measured, (c) Not measured, 25. The slope of price line (in case of commodities X and Y) is given by:, (a) Taste and preferences of consumer, (c) Price of commodity X alone, 26. Which Law states that: "When a consumer consumes more and roore units of a proouon, derived from each additional unit decreases"2, (a) Law of Equi-Marginal Utility, (c) Law of Cardinal Utility, (b) TU = U, + U2 + Ug, (d) None of these, 33., (b) MU is Zero, (d) MU is increasing, (b) Slopes upwards from left to right., (d) is parallel to the X-axis., 34., (b) Ranks, (d) None of these, 35., (b) MRS> Price Ratio, (d) None of these, 36., (b) Ranked, (d) none of these, 37, (b) Prices of both the commodities, (d) Price of commodity Y alone, 38, the, uti, (b) Law of Ordinal Utility, Bananas (B)