Consumer's equilibrium is a situation in which a consumer can get _______ satisfaction from his current level of income.
Maximum
Minimum
No
Less
Which of the following statements is NOT true of indifference curves?
They exhibit higher levels of utility as you move from the origin
They are convex to the origin
They are downward sloping
They could intersect
If a consumer is willing to pay Rs.20 for an apple and is able to buy it for Rs.15, then the consumer surplus is:
Rs.35
Rs.15
Rs.5
Rs.20
Upward sloping demand curve can be explained by:
Marginal utility theory
Diminishing marginal utility
Indifference curve theory
Consumer theory
Imagine a budget constraint between good y on the vertical axis and good x on the horizontal. How would that budget line be effected if both income and the price of both goods fell?
The new budget line will have the same slope as the original so long as the price of both goods change in the same proportion
The new budget line must be parallel to the old budget line
The budget line must become shallower
The budget line would not shift
If consumption of the good is not continuous or there are varieties in the goods then which law with hold:
Law of diminishing marginal utility
Law of increasing marginal utility
Law of diminishing returns
Law of constant returns
Indifference mean:
x is preferred to y
y is preferred to x
x and y are equally preferred
x is not preferred
An indifference curve shows combinations of two goods that:
Could be available to the consumer in a given time period
Would provide the consumer with the same level of satisfaction
A consumer could buy with their given income
Could provide the consumer with similar levels of satisfaction
Imagine a budget constraint between good y on the vertical axis and good x on the horizontal. If that budget line were to become more shallow it could be due to:
An increase in the price of good x
A change in consumer preference towards good x
An increase in the price of both goods, yet with the price of ' good y ' increasing more than that of good x
An increase in income
Decreasing slope of indifference curve is explained by
Law of diminishing marginal returns
Law of diminishing MRS
Law of demand
Law of constant MRS
