Marginal Utility is the measurement of satisfaction level of a consumer which he gains from the use of successive units of commodity. At the initial stage it increases very fast with the use of every successive unit of commodity but continuous consumption of the same makes it declining. After that a point comes when satisfaction is at fullest where MU is zero and if it is consumed further then MU starts diminishing. In other words, with increase in the consumption of units of a given commodity the marginal utility diminishes.

Demand for a good is termed inelastic through the expenditure approach when the price of the good falls, and expenditure on it falls.

There are various types of utility and time utility is one of them. Changing or deferring the time of utilization leads to time utility. It occurs where the use of commodity defers for future use when it is actually needed. Here there ll always be a time gap between the procurement/production and consumption. It is derived by keeping or storing the commodity from the time of procurement or production to the time of consumption. As warm clothes are required in winter season only though these have been produced and procured during any season.

As the consumption increases of a good increases the additional utility derived by the consumer reduces. This is the law of diminishing marginal utility. 

The law of equi-marginal utility is introduced by Alfred Marshall.

Marginal Utility derives its value from the consumption of extra unit. It is the satisfaction level of a consumer which he gains from the use of successive units of commodity, but it goes on to fall while other factors remains constant due to over consumption then it is a law of diminishing marginal utility. In simple words when a consumer is over satisfied then MU starts decrease and it is called as law of diminishing marginal utility.

When marginal utility is negative it means the consumer would not be getting any more satisfaction from consuming more of the product. Total utility will be at its highest when marginal utility is zero. But, total utility will reduce when marginal utility is negative. 

The law of diminishing marginal utility is applicable for every individual across all types of goods and services. But, the utility every individual derives from the goods and services and the rate at which the marginal utility diminishes would be different for every individual.

As the law of diminishing marginal utility states, as a consumer consumes more of the same product in one setting, the satisfaction he/she gains from the product reduces as she consumes more and more of the product. This means the marginal utility is falling. 

The marginal utility curve slopes downwards from left to right as consuming more of the same leads to a smaller marginal utility. 

True. When the price of a commodity rises the demand will fall. Quantity demanded and price are inversely related this means that as the price of the goods increase the demand of that commodity decreases and vice versa. This is because of the law of diminishing marginal utility.  According to this law, the utility/satisfaction of the consumer goes on decreasing with every additional consumption of the commodity and hence, the consumer will buy more goods only when the price decreases. Other reasons are income effect, substitution effect, different uses of commodity etc. 

False. The relationship between price and demand is negative i.e., they are inversely related.  By inversely related we mean that as the price of the goods increase the demand of that commodity decreases and vice versa. This because of the law of diminishing marginal utility.  According to this law, the utility/satisfaction of the consumer goes on decreasing with every additional consumption of the commodity and hence, the consumer will buy more goods only when the price decreases. Other reasons are income effect, substitution effect, different uses of commodity etc. 

Complementary goods are those goods which are complementary to one another in the sense that they are used jointly or consumed together to satisfy a given want. There is an inverse relationship between the demand for the good and the price of its complementary. Pen and Ink are complementary goods change in price of ink rises the demand of pen falls.

False. A rise in price is followed by a fall in demand. Quantity demanded and price are inversely related. By inversely related we mean that as the price of the goods increase the demand of that commodity decreases and vice versa. This is because of the law of diminishing marginal utility.  According to this law, the utility/satisfaction of the consumer goes on decreasing with every additional consumption of the commodity and hence, the consumer will buy more goods only when the price decreases. Other reasons are income effect, substitution effect, different uses of commodity etc. 

False. Quantity demanded and price are inversely related. By inversely related we mean that as the price of the goods increase the demand of that commodity decreases and vice versa. This because of the law of diminishing marginal utility.  According to this law, the utility/satisfaction of the consumer goes on decreasing with every additional consumption of the commodity and hence, the consumer will buy more goods only when the price decreases. Other reasons are income effect, substitution effect, different uses of commodity etc. 

• Following are the exceptions to the law of Demand are Giffen goods, Veblen effect and income change. Hence, given statement is false.

True. The mere desire of a consumer for a product is not demand. Demand includes the purchasing power of the consumer to acquire a given product at a given period. In other words, it's the amount of products or services that consumers are willing and able to purchase.

When there is an increase in income, consumers will purchase larger quantities.

False. A relatively elastic demand has a flatter curve because the percentage change in quantity demanded is greater than a percentage change in price. 
The slope of demand is steeper in case of relatively inelastic demand the price may increase or decrease but the quantity demanded will near about remain the same

The demand for salt is inelastic because irrespective of the change in price, the demand for salt remains the same. Inelastic demand is usually seen for necessary goods like salt, sugar, milk etc.

True. By elastic demand we mean that the price and other determinants of demand have a major effect on the quantity demanded of the commodity. Demand for luxuries is highly elastic because if the price of a luxury commodity increases the quantity demanded will be not be same, the change in quantity demanded will be more than the change in price and vice versa. 

Yes, it is true the geometric method is a more exact method of measuring the elasticity of demand.

Proportion of consumer’s income that is spent on a particular commodity also influences the elasticity of demand for it. Greater the proportion of income spent on the commodity, more is the elasticity of demand for it and vice-versa.
Demand for goods like salt, needle, soap, match box, etc. tends to be inelastic as consumers spend a small proportion of their income on such goods. When prices of such goods change, consumers continue to purchase almost the same quantity of these goods. However, if the proportion of income spent on a commodity is large, then demand for such a commodity will be elastic. Hence, correct answer is option B.

Demand for a commodity which satisfies different kinds of uses has more elastic demand. Such good which satisfies various wants at a single time is said to be composite goods. The demand for such commodities is elastic. Hence, given statement is true.

The budget line shows the combination of two goods a individual can consume with his current income. Hence, it is equal to the ratio of prices between the two goods. 

Four types of elasticity are demand elasticity, income elasticity, cross elasticity, and price elasticity.
Hence option C is not the types of elasticity in economics.

Price elasticity of demand is a measure of the change in the quantity purchased of a product in relation to a change in its price. Elasticity of demand = (-) % change in quantity demanded/% change in price. Hence, correct answer is option B.

The elasticity of demand means there is responsive change in demand due to the price change.
Price elasticity of demand = % Change in quantity demand / % Change in price
Hence b is the correct option.

Demand for a commodity with large number of substitutes will be more elastic. The reason is that even a small rise in its prices will induce the buyers to go for its substitutes. For example, a rise in the price of Pepsi encourages buyers to buy Coke and vice-versa. Thus, availability of close substitutes makes the demand sensitive to change in the prices. On the other hand, commodities with few or no substitutes like wheat and salt have less price elasticity of demand. Hence, correct answer is option B.

Price elasticity of demand may be defined as the degree of responsiveness of quantity demanded of a commodity in response to change in its price. It is measured in relative terms. Availability of substitute, nature of commodity, proportion of the income spend, number of users of commodity, price factor, possibility of postponement of consumption, income of the consumer, habits of the consumer, price range etc, are the factors affecting elasticity of demand.

Price elasticity of demand may be defined as the degree of responsiveness of quantity demanded of a commodity in response to change in its price. 

Total outlay method of measuring price elasticity of demand was introduced by Dr. Alfred Marshall. According to this method, the price elasticity of a product is measured on the basis of the total amount of money spent (total expenditure) by consumers on the consumption of that product. It refers to a situation when the proportionate change in the total expenditure of consumers on the consumption of a product is less than the proportionate change in the price of that product. In such a case, the numerical value of price elasticity of demand would be less than one (ep<1). Hence, option B is correct.

Elasticity is the ratio of relative change in a dependent variable to the relative change in an independent variable.
LIke demand and price is the dependent variable when the price increases then demand decreases and when price decreases then demand increases hence it is a dependent variable to the relative change in an independent variable.
So option a is correct.

Long run refers to a period in which output (supply) can be changed by changing all factors of production. Therefore, supply becomes more responsive to change in demand. The supply curve is highly elastic.

In the short run, the demand for goods tends to be inelastic or less elastic because it takes some time for consumers both to notice and then to respond to price changes.
Hence option b is correct.

Demand of salt is inelastic because salt has no close substitutes and makes up a very small amount of the household budgets so that's why a change in prices of salt has a little or no impact on its quantity demanded.

Complementary goods are those goods which are complementary to one another in the sense that they are used jointly or consumed together to satisfy a given want. There is an inverse relationship between the demand for the good and the price of its complementary. The cross demand shows the functional relationship between the price of a commodity and the demand for some other related commodity.

The law of demand states the inverse relationship between the price and the quantity demanded keeping other factors constant. In other words as the price of a commodity increases the quantity demanded of the commodity reducers and vice-versa.

Engel Curves are the locus of all points representing the quantities demanded of the goods at various levels of income, when prices and preferences are held constant. It is a type of demand curv, named after prof. Engel.