CBSE Questions for Class 11 Commerce Economics Theory Of Consumer Behaviour Quiz 12 - MCQExams.com

A relative price is?
  • Price expressed in terms of money
  • What you get paid for babysitting your cousin
  • The ratio of one money price to another
  • Equal to a money price
If the price of Orange juice increases, the demand for apple juice will ___________.
  • Increase
  • Decreases
  • Remain the same
  • Become negative
Chicken and fish are substitutes. If the price of chicken increases, the demand for fish will.
  • Increases or decreases but the demand curve for chicken will not change
  • Increases and the demand curve for fish will shift rightwards
  • Not change but there will be a movement along the demand curve for fish
  • Decreases and the demand curve for fish will shift leftwards
Demand is the.
  • Unlimited wants to consumers
  • Relationship between the quantity demanded and the price of good
  • Willingness to pay for a good if income is larger enough
  • Ability to pay for a good
As income increases, the consumer will go in for superior goods and consequently the demand for inferior goods will fall. This means.
  • Income elasticity of demand less than one
  • Negative income elasticity of demand
  • Zero income elasticity of demand
  • Unitary income elasticity of demand
When total demand for a commodity whose price has fallen increases, it is due to.
  • Income effect
  • Substitution effect
  • Complementary effect
  • Price effect
Which of the following is a property of an indifference curve?
  • It is convex to the origin
  • The marginal rate of substitution is constant as you move along an indifference curve
  • Marginal utility is constant as you move along an indifference curve
  • Total utility is greatest where the $$45$$-degree line cuts the indifference curve
The consumer is in equilibrium at a point where the budget line.
  • Is above an indifference curve
  • Is below an indifference curve
  • Is tangent to an indifference curve
  • Cuts an indifference curve
Availability of cheaper Raw Materials and Capital Equipment in the long-run constitutes -
  • Internal Economies of Scale
  • Internal Diseconomies of Scale
  • External Economies of Scale
  • External Diseconomies of Scale
If good growing condition's increases the supply of strawberries and hot weather increases the demand for strawberries, the quantity of strawberries bought.
  • Increases and the price might rise, fall or not change
  • Doesn't change but the price rises
  • Doesn't change but the price falls
  • Increases and the price rises
The aim of the consumer in allocating his income is to __________.
  • Maximize his total utility
  • Maximize his marginal utility
  • To buy the goods he wants most whatever the price
  • To buy the goods which he expects to be short in supply
Diminishing Marginal Returns implies:
  • Constant MC
  • Increasing Marginal Cost
  • Decreasing MC
  • All of the above
Indifference curve analysis is propounded by _________.
  • Alfred Marshall
  • Adam Smith
  • Hicks & Allen
  • Francis Ysidro Edgeworth
One characteristic not typical of oligopIistic industry is______________.
  • Horizontal demand curve
  • Too much importance to non-price competition.
  • Price leadership.
  • A small number of firms in the industry.
Which of the following goods are likely to have perfectly inelastic demand?
  • Car
  • Salt
  • Cabbage
  • Sugar
If the demand is more than supply, then the pressure on price will be.
  • Upward
  • Downward
  • Constant
  • None of the above
Assume that in the market for good Z there is a simultaneous increase in demand and the quantity supplied. The result will be :
  • An increase in equilibrium price and quantity.
  • A decrease in equilibrium price and quantity.
  • An increase in equilibrium quantity and uncertain effect on equilibrium price.
  • A decrease in equilibrium price and increase in equilibrium quantity.
A decrease in the demand for cameras keeping other things the same results in ________.
  • Increase the number of cameras bought
  • Decrease the price but increase the number of cameras bought
  • Increase the price of cameras
  • Decrease the price and also the number of cameras bought
If the demand for a good is price elastic, a fall in price will lead to ____________.
  • a rise in total expenditure on the good
  • a fall in sales
  • a fall in total expenditure on the good
  • no change
_____ depicts complete picture of consumer's tastes and preferences.
  • Budget line
  • Average cost curve
  • Indifference map
  • Marginal revenue curve
Given the consumer's indifference map and the money income, the equilibrium position of the consumer will be on the indifference curve, which is ____________.
  • highest in the indifference map
  • lowest in the indifference map
  • highest but cut the price line
  • highest but tangent to the price line
The slope of indifference curve indicates __________.
  • price ratio between two commodities
  • marginal rate of substitution
  • factor substitution
  • level of indifference
Demand curve illustrates __________.
  • inverse relationship between quantity demanded and its cost of production
  • the inverse relation between the rate of change of demand and price
  • direct relationship between the demand and the price of a commodity
  • the inverse relationship between the rate of change in demand and cost of production at a given time
Under a free economy, prices are
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  • Regulated
  • Determined through free interplay of demand and supply
  • Partly regulated
  • None of the above
When as a result of decrease in the price of a good, the total expenditure made on it decreases, we say that price elasticity of demand is _________.
  • less than unity
  • unity
  • zero
  • greater than unity
The things remaining same, when a consumer's income increases his equilibrium point moves to ______________.
  • a higher indifference curve
  • a lower indifference curve
  • remains unchanged on the same indifference curve
  • moves to the left-hand-side on the same indifference curve
Price changes from $$Rs. 6$$ to $$Rs. 4$$ and the quantity demanded changes from $$3$$ to $$8$$, Elasticity of demand is _________.
  • $$5$$
  • $$1$$
  • $$0.2$$
  • Zero
Which of the following has more elastic demand?
  • A commodity without substitutes
  • A commodity with substitutes
  • A commodity on which a small fraction of income is spent
  • A commodity the use of which cannot be postponed
One per cent change in income causes $$10$$ per cent increase in quantity demanded. Elasticity of demand is ___________.
  • $$1$$
  • $$10$$
  • $$5$$
  • $$2$$
If the price of $$'Y'$$ falls by $$20$$% and the quantity demamded falls by $$25$$%, $$Y$$ has:
  • Inelastic demand
  • Unit elastic supply
  • Zero elasticity
  • Elastic demand
As the price of oranges rises _________.
  • the quantity demanded for oranges increases
  • the demand curve for oranges shifts to the right
  • the quantity demanded for oranges decreases
  • the demand curve for oranges shifts to the left
A market demand curve for shoes indicates, how many pairs of shoes _____.
  • are likely to be sold at each possible price for shoes
  • must be bought in order to achieve parity
  • government will demand at each possible price
  • are lying as inventory in the factories
Position of the price line would ________ with a change in the money income of the consumer.
  • not change
  • change
  • depend on other factors
  • none of the above
The slope of price line is given by the ______________.
  • taste and preferences of the consumer
  • prices of both the commodities
  • price of commodity $$X$$ alone
  • price of commodity $$Y$$ alone
Given the income of the consumer, the slope of the price line is determined by the __________.
  • Price of $$X$$
  • Price of $$Y$$
  • Ratio of prices of $$X$$ and $$Y$$
  • none of the above
The value of elasticity co-efficient varies between ______.
  • zero and infinity
  • zero and one
  • one and infinity
  • none of the above
The indifference curve, which is 'L' shaped, represents __________.
  • perfect complementary
  • perfect substitutability
  • no substitutability
  • unrelated goods
An income demand curve for inferior commodity always slopes _________.
  • upwards to the right
  • backwards to the left
  • downwards to the right
  • horizontally
In the longer period, that permits adjustments, demand is likely to be ______________.
  • inelastic
  • elastic
  • unit elastic
  • none of the above
Ceteris paribus, a change in the price of a commodity causes the quantity demanded of its complements to move:
  • In the same direction
  • In the opposite direction
  • In an insignificant manner
  • Cannot be determined
Goods $$X$$ and $$Y$$ are perfect substitutes. A consumer's indifference curve for these commodities is represented by a ______.
  • upward sloping straight line
  • upward sloping convex curve
  • downward sloping straight line
  • downward sloping curve which is convex to origin
Which of the following could provide an example of exceptional demand curve?
i.  Demand for "Giffen goods"
ii. Demand based on fear of a future rise in prices
iii. Demand for second-hand clothes
iv. Demand for daily newspaper
  • i only
  • i and ii
  • ii and iii
  • i, ii, iii and iv
An exceptional demand curve is one that slopes ________.
  • upwards to the right
  • downwards to the right
  • upwards to the left
  • horizontally
Market demand curve, normally, would _____________.
  • be a horizontal straight line
  • slope downwards
  • be a vertical straight line
  • slope upwards
Equally spaced indifference curves in an indifference map indicate that:
  • All indifference curves have same level of satisfaction
  • Higher indifference curve yields satisfaction which is double from the one that is immediately below it
  • Lower indifference curve yields less satisfaction than that from the higher one
  • Level of satisfaction is not associated with the position of the individual indifference curve
Under indifference curve approach, the consumer is able to:
  • Express the exact amount of satisfaction derived out of given combination of commodities
  • Rank the satisfaction derived from the given combination of commodities
  • Recognise a single combination yielding maximum satisfaction
  • None of the above
The indifference curves approach does not assume:
  • Ordinal measure of satisfaction
  • Diminishing marginal utility of money
  • Substitution among commodities
  • Cardinal measure of utility
An indifference curve slopes downwards to the right as this implies that consumer is indifferent between:
  • Less of one commodity and same amount of another
  • More of one commodity and same amount of another
  • Greater amount of both the commodities
  • None of the above
The total utility, which a consumer derives from $$n^{th}$$ units of a commodity minus the total utility he derives from $$(n - 1)$$ units is:
  • The marginal utility of the $$nth$$ unit
  • Consumer's surplus at $$n$$ units
  • Elasticity of the consumer's demand
  • Consumer equilibrium demand
The doctrine of consumer surplus is based on:
  • Indifference curve analysis
  • Revealed preference theory
  • Law of substitution
  • The law of diminishing marginal utility
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