CBSE Questions for Class 11 Commerce Economics Theory Of Consumer Behaviour Quiz 7 - MCQExams.com

When e > 1 then MR is ____________.
  • Zero
  • Negative
  • Positive
  • One
Which of the following thing(s) is/are essential to become effective demand?
X. Desire for a commodity
Y. Willingness to pay
Z. Ability to pay for the commodity
Select the correct answer from the options given below -
  • X
  • Y
  • Z
  • All of the above
According to law of demand, other things being equal, if the price of a commodity rises, its quantity demanded will _________.
  • decline
  • increase
  • remains same
  • rise
The Law of Diminishing Marginal Utility was formulated by  
  • "Hermann Heinrich Gossen"
  • Hicks
  • Philips
  • Lipsey
Demand for a commodity refers to _________.
  • desire for the commodity
  • ability to pay for the commodity
  • quantity demanded of that commodity
  • quantity of the commodity demanded at a certain price during any particular period of time.
The law of demand is ________.
  • a quantitative statement
  • a qualitative statement
  • both a quantitative and a qualitative statement
  • neither a quantitative nor a qualitative statement
As per _____, a fall in the price of a commodity causes a household to buy more of that commodity, while rise in price causes the household to buy less of that commodity, other things being constant.
  • law of supply
  • law of diminishing marginal utility
  • law of demand
  • law of diminishing marginal rate of substitution
What can be said about the price elasticity of demand for fresh milk?
  • It is perfectly elastic
  • It is elastic
  • It is perfectly inelastic
  • It is inelastic
In short run Diminishing Marginal Return are implied by ______
  • rising Marginal cost curve
  • rising total cost curve
  • U shaped production curve
  • downward sloping demand curve
_______ refers to how much quantity of a product or service is desired by buyers backed by the ability and willingness to pay.
  • Supply
  • Desire
  • Demand
  • Willingness
The quantity demanded of a good or service is the amount that ______.
  • consumer demands 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 buy but might not be able to afford
  • is actually bought during a given time period at a given price
All but one of the following are assumed to remain the same under the law of demand while plotting the individual demand curve for a commodity. Which one is it?
  • The preference of the individual
  • His monetary income
  • Price of the commodity
  • Price of related goods
A demand curve _________.
  • slopes downward to upward from right to left
  • slopes upward to downward from left to right
  • is a horizontal straight line parallel to x-axis
  • slopes upward to downward from right to left
Demand for goods by an individual or the market as a whole is conventionally expressed in the form of
I.Demand schedule
II.Demand function
III.Demand curve
  • I & II
  • III only
  • II & III only
  • I, II & III
The good which cannot be consumed more than once is known as ______.
  • durable good
  • non-durable good
  • producer good
  • none of the above
As per law of demand, there is _______ between price and quantity demanded, other things being equal.
  • a direct relationship
  • an indifferent relationship
  • an inverse relationship
  • a positive correlation
A ____ is a tabular form of describing the relationship between quantities demanded of a good in response to its price per unit, while all non-price determining variables remain unchanged.
  • demand schedule
  • demand function
  • demand curve
  • all of the above
Which of the following is a graphic representation of the demand schedule?
  • Demand graph
  • Demand chart
  • Demand curve
  • Demand area
A relative price is ________.
  • price expressed in terms of money
  • what you get paid for baby sitting your cousin
  • the ratio of one price to another
  • equal to a money price
Ceteris paribus means _______.
  • other things not being same
  • other things being unequal
  • other things being different
  • other things being equal
Which of the following assumption is applicable for the law of diminishing marginal utility?
  • The consumer is rational human being and he aims at minimization of satisfaction.
  • The units of consumption are of reasonable size.
  • All the units of the given commodity are heterogeneous.
  • There is long time interval between the consumption of the goods.
The law of diminishing marginal utility states that as the stock of a commodity with the consumer _______, its marginal utility to the consumer ________.
  • decreases; decreases
  • increases; decreases
  • decreases; remains unchanged
  • increases; increases
Identify which of the following statement is correct and which is incorrect.
A. The marginal utility of a good increase, if the want of the consumer is intensified by consuming a very small quantity of it such as a very little quantity of water given to a very thirsty person.

B. The law of diminishing marginal utility states that as the stock of a commodity decreases with the consumer, its marginal utility to the consumer decreases.
  • A correct, B correct
  • A correct, B incorrect
  • A incorrect, B incorrect
  • A incorrect, B correct
________ says that the additional benefit which a person derives from a given increase in his stock of a thing diminishes with every increase in the stock that he already has.
  • Marshall
  • Robbins
  • Keynes
  • Smith
In economics, ______ of a good is its expected capacity to satisfy a human want.
  • usefulness
  • ability
  • capacity
  • utility
Which of the following assumption is NOT applicable for the law of diminishing marginal utility?
(i) All the units of the given commodity are heterogeneous.
(ii) The units of consumption are of unreasonable size.
(iii) The consumer is rational human being and he aims at minimization of satisfaction.
  • (i)
  • (ii)
  • (iii)
  • All of the above

Comforts lie between _______ and ___________.
  • inferior and necessities goods
  • luxuries and inferior goods
  • necessities and luxuries
  • none of the above
Which of the following is an exception to the law of diminishing marginal utility?
  • Reading
  • Miser
  • Hobbies
  • All of the above
Which of the following factors or principle is/are responsible for the operation of the law of demand, or for the downward slope of demand curve?

(X) The law of diminishing marginal utility

(Y) The law of equi-marginal utility

(Z) Increased real income

Select the correct answer from the options given below  -
  • (X)
  • (Y)
  • (Z)
  • All of the above
Which of the following factors or principle is/are responsible for the operation of the law of demand, or for the downward slope of demand curves?
  • The law of increasing marginal utility
  • The law of supply
  • Both (A) and (B)
  • The law of diminishing marginal utility
When price of tomatoes increases people buy tomato puree. You may thus infer that tomato puree and tomatoes are ________.
  • normal goods
  • complements
  • substitutes
  • inferior goods
All of the following are determinants of demand, except _________.
  • tastes and preferences
  • quantity supplied
  • income
  • price of related goods
Which of the following can be treated as determinant of demand?
  • Level of consumer income
  • Prices of related commodity
  • Price of the commodity itself
  • All of the above
Which of the following is a limitation of law of diminishing marginal utility?
  • Marginal utility in certain cases may increase rather than decrease, e.g. consumption of wine by a drunkard.
  • Utility is not quantifiable, i.e., it cannot be measured.
  • Consumer does not consume only one commodity in real life. He has to attain equilibrium by consuming a large number of goods and services.
  • All of above.
The first determinant of the demand for a good is:
Levels of income of consumers
Prices of related commodity
Price of the commodity itself
  • 1
  • 2
  • 3
  • All of the above
Chicken and fish are substitutes. If the price of chicken increases, the demand for fish will _______.
  • increase or decrease, but the demand curve for chicken will not change
  • increase and the demand curve for fish will shift rightwards.
  • not change, but there will be a movement along the demand curve for chicken.
  • decrease and the demand curve for fish will shift leftwards.
With a fall in the price of a commodity _________.
  • consumers real income increases
  • consumers real income decreases
  • there is no change in the real income of the consumer
  • none of the above
Car and petrol are example of ________.
  • complementary goods
  • substitute goods
  • Giffen goods
  • competitive goods
__________ and ________ do  not directly affect the demand curve.
  • The price of related goods, preferences of consumer
  • The costs of production, bank opening hours
  • Consumer incomes, tastes of consumer
  • The price of related goods, consumer income
Potato chips and popcorn are substitutes. A fall in the price of potato chips will lead to ________ in demand for potato chips and the quantity demanded for popcorn will ________.
  • increase; increase
  • increase; decrease
  • decrease; increase
  • decrease; decrease
Motor cycle and scooter are example of __________.
  • inferior goods
  • competitive goods
  • Giffen goods
  • (A) or (B)
Ball-pen and refill are example of ________.
  • competitive goods
  • substitute goods
  • Giffen goods
  • complementary goods
_______ are those goods that can be substituted for each other like coffee and tea.
A. Substitute goods
B. Competitive goods
  • A only
  • B only
  • Neither A nor B
  • A or B
Goods which are consumed simultaneously like car and petrol are known as _________.
  • conceptive goods
  • substitute goods
  • Giffen goods
  • complementary goods
If the price of iPods increases and as a consequence, the demand for MP3s increases, then iPods and MP3s are ________.
  • ceteris paribus products
  • substitute products
  • independent products
  • complementary products
According to percentage method or arithmetic method of elasticity of demand, if percentage change in quantity demanded is smaller than the percentage change in price, the elasticity is said to be _________.
  • unitary (i.e. one)
  • less than one
  • greater than one
  • none of the above
According to percentage method or arithmetic method of elasticity of demand, if the percentage change in quantity demanded is greater than the percentage change in price, the elasticity will be _________.
  • unitary (i.e. one)
  • less than one
  • greater than one
  • none of the above
According to graphic or point method of elasticity of demand, at lower points on a straight-line demand curve, to the right of the mid-point, elasticity will be _________.
  • unitary (i.e. one)
  • less than one
  • greater than one
  • none of the above
__________ is defined as the responsiveness of the quantity demanded of a good to changes in one of the variable on which demand depends or we can say that it is the percentage change in quantity demanded divided by the percentage in one of the variables on which demand depends.
  • Determinants of demand
  • Exception to demand
  • Elasticity of demand
  • All of above
According to percentage method or arithmetic method of elasticity of demand, if percentage change of both quantity demanded and price is same, elasticity of demand is said to be _________.
  • unitary (i.e. one)
  • less than one
  • greater than one
  • none of the above
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