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

11th Grade > Economics - 1

CONSUMER BEHAVIOR MCQs

Total Questions : 30 | Page 3 of 3 pages

Question 21. All attainable combinations of Good-X and Good-Y are below the budget line of a consumer. State True or False.

True
False
change in preferences
change in utility

Discuss Question

Answer: Option B. -> False
:
B
All attainable combinations of Good-X and Good-Y are below as well as along the budget line.

Question 22. A consumption point inside the budget line

is unaffordable.
shows that the consumer spends income on only one of the goods.
shows that the consumer has chosen to spend all of his or her income on both products.
is possible to afford but has some unspent income.

Discuss Question

Answer: Option D. -> is possible to afford but has some unspent income.
:
D
Any point inside the budget line indicates that it is possible to afford but has spent unspent income.

Question 23. Moving along an indifference curve

the consumer prefers some of the consumption points to others.
marginal rate of substitution for a good increases as more of the good is consumed.
marginal rate of substitution is constant.
consumer does not prefer one consumption point to another.

Discuss Question

Answer: Option D. -> consumer does not prefer one consumption point to another.
:
D
It indicates that the consumer does not prefer one consumption point to another.

Question 24. The fact that rubies are more expensive than milk reflects the fact that for most consumers

the total utility from rubies exceeds that from milk
the marginal utility from rubies equals that from milk
more milk is consumed than rubies
a quart of rubies is prettier than a quart of milk

Discuss Question

Answer: Option C. -> more milk is consumed than rubies
:
C
Because more milk is consumed, the MU from milk is lower than the MU from rubies.

Question 25. Which of the following is not concerned with the problem of choice

Alternative uses of resources
Excessive income
Unlimited wants
Limited (scarce) resources

Discuss Question

Answer: Option B. -> Excessive income
:
B
The problem of choice is concerned with how limited resources are rationally allocated to alternative uses when consumers and producers have unlimited wants.

Question 26. If production possibility frontier is linear it implies

Constant opportunity cost
Economy is stagnant
Underemployment of factor of production
With the increase in production, opportunity cost also increases

Discuss Question

Answer: Option A. -> Constant opportunity cost
:
A
If the shape of the PPF curve is a straight-line, the opportunity cost is constant as production of different goods is changing.

Question 27. The shape of transformation curve is changed by

opportunity cost
total cost
marginal opportunity cost
none of these

Discuss Question

Answer: Option C. -> marginal opportunity cost
:
C
The shape of transformation curve is changed by marginal opportunity cost.

Question 28. When onion price hits hard, the poor man simply stops buying it. Which one of these is the correct explanation for this?

A rupee spent on buying onions does not yield rupee worth of satisfaction
Price increases without any increase in the income of the consumer
The consumer has already reached equilibrium and is not willing to purchase additional onions
The consumer shifts his priorities to more urgent needs

Discuss Question

Answer: Option A. -> A rupee spent on buying onions does not yield rupee worth of satisfaction
:
A
A consumer buys a commodity only when a rupee spent on it yields rupee worth of satisfaction

(M U_{M})

. A poor man stops the consumption of onion when he finds that a rupee spent on it does not yield rupee worth of satisfaction (no matter what quantity of onions is purchases), so that,