CBSE Questions for Class 11 Commerce Economics Theory Of Consumer Behaviour Quiz 11 - MCQExams.com

Utility obtained from tea may be affected if no sugar is available. This statement is _________.
  • True
  • False
  • Partially True
  • Nothing can be said about Utility
a consumer consumed three units of a product. Marginal utilities derived from the three units are Rs. 400, Rs. 350 and Rs. 300, respectively. If the price of the product is Rs. 300 per unit, the Consumer surplus is _____
  • 0
  • 50
  • 100
  • 150
If MU of money spent on Commodity A is greater than the MU of money spent on Commodity B, the Consumer will withdraw some money from the purchase of B, and will spend it on A, till the MU of money in the two cases becomes equal. Which theory says so?
  • Theory of Total Utility
  • Theory of Diminishing Marginal Utility
  • Theory of Equi-Marginal Utility
  • Theory of Diminishing Marginal Returns
The Consumer will attain maximum satisfaction, and will be in equilibrium when MU of money spent on various goods that he buys, are ____
  • Zero
  • Decreasing
  • Increasing
  • Equal
The concept of Consumer Surplus arises since for all earlier units purchased (i.e. prior to equilibrium point) ___
  • MU < Price
  • MU = Price
  • MU > Price
  • MU = Zero
The Consumer will be willing to purchase an item, so long as the Marginal Utility (additional satisfaction) derived is equal to the Price of the commodity. This principle is called_______.
  • Consumer Equilibrium
  • Consumer Surplus
  • Consumer Advantage
  • Consumer Exploitation
In a Free Market Economy, when consumers increase their purchase of a good and the level of ___________ exceeds ___________, then the prices of those goods tend to rise.
  • Demand, Supply
  • Supply, Demand
  • Prices, Demand
  • Profits, Supply
In which approach is Utility ranked in order of preferences but not measured and quantified ?
  • Cardinal
  • Ordinal
  • Independent Variables Approach
  • Both Cardinal and Ordinal
If Mu, is the Marginal Utility of product X and Px is the price of Product X, a Rational Consumer will consume the Product X until ________.
  • MUx > Px
  • Mux < Px
  • $$ MUx\le Px $$
  • MUx = Px
In economics, what a consumer is ready to pay minus what he actually pays, is termed as ______.
  • consumer's equilibrium
  • consumer's surplus
  • consumer's expenditure
  • all of the above
If Apples from Kashmir are available for Sale in Chennai, it refers to creation of ____________________.
  • Form Utility
  • Place Utility
  • Time Utility
  • Personal Utility
In the above diagram, the Consumer's Total Utility is given by_____
950613_caaeff0581f54e1ea1e38eb65be19b97.png
  • Area under OMBC
  • Area under OABC
  • Area under AMB
  • Cannot be determined
............is the want satisfying power of the product.
  • Demand
  • Utility
  • Supply
  • None of these
The PPC does not give the desirable point production. It only indicate the possible combination of __________ that can be produced with the available resources.
  • Two goods
  • Three good
  • Number of goods
  • A single good
Which of the following is not an assumption made in constructing a PPC?
  • The economic resources available for use in the period are fixed
  • The economic resource and be used to produce two broad classes of goods
  • Technology remains constant during the period under consideration
  • Technology keeps changing at regular intervals
Which of the following pairs of goods in an example of substitutes?
  • Tea and Sugar
  • Tea and Coffee
  • Tea and Ball Pen
  • Tea and Shirt
Raw Material converted into Finished Product in the manufacturing process, refers to creation of _________________.
  • Form Utility
  • Place Utility
  • Time Utility
  • Personal Utility
Which of the following constitute an assumption in constructing a PPC?
  • Only two types of goods
  • Fixed quantity of productive resources
  • No change in technology
  • All of the above
If the Price of Product A increases relative to the Price of Substitute B & C, the demand for ______________.
  • B will increase
  • C will increase
  • B and C will increase
  • B and C will decrease
Market Demand is also called -
  • Producer Demand
  • Individual Demand
  • Industry Demand
  • Household Demand
If the prices of ice-cream and chocolate are Rs. 40 and Rs. 30 respectively, and the Marginal Utility of Chocolate is 150, what is the Marginal Utility of ice-cream assuming that consumer is at equilibrium ?
  • 112.5
  • 125
  • 200
  • 225
The demand for a factors of production is said to be a derived demand because-
  • It is a function of the profitability of an enterprise.
  • It depends on the supply of complementary factors.
  • It stems from the demand for the final product.
  • It arises out of means being scarce in relation to wants.
........refers to the Consumer's Reaction to a change in the relative prices of two products, keeping the Total Utility constant.
  • Consumer Surplus
  • Income Effect
  • Substitution Effect
  • Law of Diminishing Marginal Utility
If the value of MUx/Px is more than MUy /Py, then the Consumer ________.
  • Will increase the Consumption of product X reduce product Y
  • will reduce the consumption of product X and increase product Y
  • Will consume more of product X and Y
  • will consume less of product X and Y
In case of necessaries, the Marginal Utility of the first few units are_______.
  • Infinite
  • Zero
  • There is no Marginal Utility at all
  • Nothing can be sai
which among the following is the drawback of Consumer Surplus (as explained in Marginal Utility analysis) ?
  • It is highly hypothetical and imaginary
  • It ignores interdependence between goods
  • It can not be measured in terms of money because Marginal Utility of money changes
  • All of the above
If we make the assumption that Utility cannot be expressed in monetary terms, the concept of Consumer's Surplus _______..
  • Will still apply
  • Will not apply
  • Only Producers' Surplus will arise
  • Nothing can be said
The concept of Consumer's Surplus is based on the assumption that Marginal Utility of Money is.
  • Zero
  • Negative
  • Constant
  • Any of the above
According to Indifference Curve analysis, Utility can be measured in ____ .
  • Ranks
  • Cardinal Numbers
  • Nominal Values
  • All of the above
If the elasticity of demand for a commodity is perfectly inelastic, then which of the following is incorrect?
  • The commodity must be essential to those who purchase it.
  • The commodity must have many substitutes.
  • The commodity will be purchased regardless of increase in its price.
  • The elasticity of demand for this commodity must be equal to zero.
Fall in quantity demanded of a product as a result of rise in price is known as -
  • Change in Demand
  • Contraction of Demand
  • Expansion of Demand
  • Alteration of Demand
Shift in demand does not take place due to -
  • Change in the price of the product
  • Change in the tastes and preferences
  • Change in consumer habits
  • Change in population
When Consumers feel that if the commodity is expensive, that it has got more utility, we are referring to-
  • Inferior Goods
  • Normal Goods
  • Conspicuous Goods
  • Giffen Goods
The concept of elasticity of demand was developed by ________________.
  • Alfred Marshall
  • Edwin Cannon
  • Paul Samuelson
  • Fredric Bonham
A book seller estimates that if the price of a book is increased from Rs.60 to Rs. 67, the quantity of books demanded will decrease from 2,035 to 1,The book's price elasticity of demand is approximately ________.
  • 0.4
  • 0.8
  • 1.0
  • 2.5
Demand for electricity is inelastic because ______________________.
  • It is very expensive.
  • It does not have a number of close substitutes.
  • Both A & B
  • None of the above.
Under the Law of Diminishing Marginal Utility, Consumers continue buying till Price equals Marginal Utility. Hence at lower prices -
  • Higher quantities will be demanded
  • Lower quantities will be demanded
  • No quantities will be demanded
  • All of the above
Since Consumers continue buying till Price equals Marginal Utility, if the price of a product is lower, the Consumer will attain equilibrium -
  • At a lower quantity level
  • At a higher quantity level
  • At zero quantity level
  • All of the above
When quantity demanded changes by larger percentage than price, elasticity is termed as __________.
  • inelastic
  • perfectly elastic
  • elastic
  • perfectly inelastic
All but one of the following are assumed to remain the same while drawing an individual's Demand curve for a commodity. Which one is it?
  • The preference of the individual
  • His monetary income
  • Price
  • Price of related goods
Under Total Outlay Method, if as a result of the decrease in price of a product, the total expenditure on the product decreases, we say that Price Elasticity of Demand is ________________.
  • Equal to unity
  • Greater than unity
  • Less than unity
  • Zero
Demand for a commodity refers to.
  • Desire for the commodity
  • Need for the commodity
  • Quantity demanded of that commodity
  • Quantity of the commodity demanded at a certain price during any particular period of time
In Demand-Supply Analysis, if the income of the Consumer increases, the Demand Curve for an inferior good -
  • Shifts upward to the right
  • Shifts downward to the left
  • Shifts upward to the left
  • Shifts downward to the right
The Law of Demand, assuming other things to remain constant, establishes the relationship between.
  • Income of the consumer and the quantity of a good demanded by him
  • Price of a good and the quantity demanded
  • Price of a good and the demand for its substitute
  • Quantity demanded of a good and the relative prices of its complementary goods
Suppose the demand for meals at a medium-priced restaurant is elastic. If the management of the restaurant is considering raising prices, it can expect a relatively.
  • Large fall in quantity demanded
  • Large fall in demand
  • Small fall in quantity demanded
  • Small fall in demand
An increase in price will result in an increase in total revenue if.
  • The percentage change in quantity demanded is less than the percentage change in price
  • The percentage change in quantity demanded is greater than the percentage change in price
  • Demand is elastic
  • The consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low
Demand for a good will tend to be more elastic if it exhibits which of the following characteristic's?
  • It represents a small part of the consumer's income
  • The good has many substitutes available
  • It is a necessary(as opposed to a luxury)
  • There is little time for the consumer to adjust to the price change
For which goods does an increase in income lead to increase in demand?
  • Abnormal
  • Normal
  • Inferior
  • Superior
Which one is not an assumption of the theory of demand based on indifference curves analysis?
  • Given scale of preferences as between different combinations of two goods
  • Diminishing marginal rate of substitution
  • Constant marginal utility of money
  • Consumers would always prefer more of a particular good to less of it, other things remaining the same
The quantity demanded of a good or service is the amount that.
  • Consumer plan to buy during a given time period at a given price
  • Firms are willing to sell during a given time period at a given price
  • A consumer would like to but might not be able to afford
  • Is actually bought during a given time period at a given price
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