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 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
Consumer's equilibrium is a situation in which a consumer can get _______ satisfaction from his current level of income.
Maximum
Minimum
No
Less
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
The formula of marginal utility is
MUn - 1 - MU1
TUn - TUn - 1
TU/MU
TU × MU
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
In Economics the term utility means
Sorrow
Enjoyment
Satisfaction
Development
Upward sloping demand curve can be explained by:
Marginal utility theory
Diminishing marginal utility
Indifference curve theory
Consumer theory
Decreasing slope of indifference curve is explained by
Law of diminishing marginal returns
Law of diminishing MRS
Law of demand
Law of constant MRS
