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
Decreasing slope of indifference curve is explained by
Law of diminishing marginal returns
Law of diminishing MRS
Law of demand
Law of constant MRS
Indifference mean:
x is preferred to y
y is preferred to x
x and y are equally preferred
x is not preferred
Scale of preference of a consumer is independent of:
Market Price
Scale of preference of other consumer
Income of the consumer
All of the above
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
When MRS is constant x and y are :
Not related
Perfect Substitutes
Perfect Complements
Inferior Goods
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
Consumer's equilibrium is a situation in which a consumer can get _______ satisfaction from his current level of income.
Maximum
Minimum
No
Less
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