Decreasing slope of indifference curve is explained by
Law of diminishing marginal returns
Law of diminishing MRS
Law of demand
Law of constant MRS
When MRS is constant x and y are :
Not related
Perfect Substitutes
Perfect Complements
Inferior Goods
The formula of marginal utility is
MUn - 1 - MU1
TUn - TUn - 1
TU/MU
TU × MU
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
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
Total utility and marginal utility are same when a consumer takes ________ of a commodity.
5th Unit
10th Unit
6th Unit
1st Unit
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
Attainable
Not attainable
Desirable and attainable
Desirable and not attainable
A consumer can get maximum satisfaction where the _________ are same.
Total utility and Marginal utility
Price of a commodity and Marginal utility
Price of a commodity and Total utility
Marginal Utility
Indifference mean:
x is preferred to y
y is preferred to x
x and y are equally preferred
x is not preferred
