Smoothness of indifference curve means
X and Y are substitutes of each other
X and Y can be consumed in fixed proportion
Perfect divisibility of two goods
Perfect non divisibility of two goods
Consumer's equilibrium is a situation in which a consumer can get _______ satisfaction from his current level of income.
Maximum
Minimum
No
Less
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
A consumer with a given income will maximize their utility when :
The total utility derived from each commodity consumed is equal
The marginal utilities derived from each commodity consumed are proportional to their prices
The marginal utility derived from each commodity is equal
The marginal utility derived from each product consumed is zero
Diminishing MRS means :
Consumer wants to give up lesser units of y in exchange for good x
Consumer wants to give up more units of y in exchange for good x
Consumer wants to give up same unit of y in exchange for good x
Consumer wants to give up more units of x in exchange for good y
Indifference mean:
x is preferred to y
y is preferred to x
x and y are equally preferred
x is not preferred
The formula of marginal utility is
MUn - 1 - MU1
TUn - TUn - 1
TU/MU
TU × MU
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
Total utility and marginal utility are same when a consumer takes ________ of a commodity.
5th Unit
10th Unit
6th Unit
1st Unit
Upward sloping demand curve can be explained by:
Marginal utility theory
Diminishing marginal utility
Indifference curve theory
Consumer theory
