Consumer Behavior(11th Grade > Economics - 1 ) Questions and answers for exam Preparation

11th Grade > Economics - 1

CONSUMER BEHAVIOR MCQs

Total Questions : 30 | Page 2 of 3 pages

Question 11. Suppose that the following headlines appeared in a newspaper. Which would most clearly represent a macroeconomic issue?

"Central Bank Raises Interest Rates"
"Auto Dealership to Cut Prices"
"Coffee Bean Crop Falls by 10 Percent"
"United Workers Union to Strike April 15"

Discuss Question

Answer: Option A. -> "Central Bank Raises Interest Rates"
:
A
Macroeconomics is that branch of Economics, which studies economic problems (or economic issues) relating to economy as a whole. Since Central bank is at the center of the entire banking system, this is an example of Macroeconomic variable.

Question 12. Which of the following would be strictly a microeconomic topic?

a general rise in interest rates
a drop in inflation
an increase in total production in India
an increase in the price of TATA Nano

Discuss Question

Answer: Option D. -> an increase in the price of TATA Nano
:
D
Microeconomics studies economic problems relating to individual economic units like a consumer, or a producer. An increase in the price of TATA Nano is related to an individual unit, which makes it a microeconomics topic.

Question 13. The opportunity cost of watching television is:

all of the alternative programs that appear on other stations.
zero because there is no money expenditure involved.
the alternative use of the time foregone by watching the program.
zero if it benefits you

Discuss Question

Answer: Option C. -> the alternative use of the time foregone by watching the program.
:
C
The opportunity cost here is the time foregone by watching the television.

Question 14. If the economy is producing a combination of goods inside its production possibilities frontier, then

workers are on vacation
a significant number of workers have little education
some resources are being wasted
technology must improve before output can increase

Discuss Question

Answer: Option C. -> some resources are being wasted
:
C
Any point inside the PPC indicates inefficient utilization of resources.

Question 15. Which one of the following is the most accurate definition of economics?

Economics is the study of stocks and bonds.
Economics is the study of how people allocate unlimited resources.
Economics is the study of how consumers choose to spend their income.
Economics is the study of how society chooses to allocate scarce resources.

Discuss Question

Answer: Option D. -> Economics is the study of how society chooses to allocate scarce resources.
:
D
Economics is the study of how society chooses to allocate its scarce resources in order to satisfy unlimited wants.)

Question 16. According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:

is positive.
outweighs the extra cost.
exceeds the benefits of the previous hour of study.
will raise your exam score.

Discuss Question

Answer: Option C. -> exceeds the benefits of the previous hour of study.
:
C
You should spend more time if the additional hour offers an increase in satisfaction.

Question 17. In a situation when

M R S > P_{X} / P_{Y}

, the consumer would react by

diminishing the consumption of commodity-X
increasing the consumption of commodity-Y
increasing the consumption of commodity-X
none of these

Discuss Question

Answer: Option C. -> increasing the consumption of commodity-X
:
C
MRS is the amount of Good-Y which a consumer is willing to give up for one unit more of Good-X. In a situation when

M R S > P_{X} / P_{Y}

, the consumer would react by increasing the consumption of commodity-X.

Question 18. Reeta buys only compact discs and tapes and spends all her income. The marginal utility from a compact disc is 30 and the marginal utility from a tape is 20. The price of a compact disc is INR 15 and the price of a tape is INR 10. To maximize her utility, Reeta should