Consumers Equilibrium and Demand Test

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Consumers Equilibrium and Demand Test - 1

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Weekly Quiz Competition

Question 1
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Which of the following statements regarding utility is not true?

A
It helps consumers to make choices.

B
It is a satisfying power of a commodity.

C
Utility is always measurable.

D
It is purely a subjective entity.

Solution

Utility is a subjective concept and varies from person to person, at different times and at different places. There cannot be a standardised measure for utility. Therefore, the point that utility always measurable is not true.
Question 2
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Which of the following utility approach is based on the theory of Alfred Marshall?

A
Independent variable approach

B
Cardinal utility approach

C
Ordinal utility approach

D
None of these
Question 3
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_____________ is the addition to total utility by the consumption of one additional unit of the commodity?

A
Marginal utility

B
Ordinal utility

C
Total utility

D
Average utility

Solution

Marginal utility is rate of change of total utility with respect to consumption of a commodity.so it is an addition to total utility resulting from a unit change in total utility.
Question 4
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Which of the following utility approach suggests that utility is a measurable and quantifiable entity?

A
Cardinal approach

B
Ordinal approach

C
Both cardinal & ordinal

D
None of these

Solution

In cardinal utility approch utility is measured in numerical terms.And unit used for measurement is known as utils.
Question 5
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____________ shows various combinations of two goods that give same amount of satisfaction to the consumer?

A
Indifference curve

B
Isoquant

C
Isocost curve

D
Marginal utility curve

Solution

On indifference curve,consumer gets same satisfaction from each combination hence he is indifferent towards all combinations.
Question 6
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Indifference curve slopes___________?

A
Downward to the right

B
Downward to the left

C
Upward to the right

D
Upward to the left

Solution

In order to increase the consumption of one good,other good must be sacrificed as utility level through out the indifference cure has to be same.Due to inverse relation between two goods indifference curve slopes downwards from left to right.
Question 7
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_____________ is defined as the difference between what the consumer is willing to pay for a product and what he is able to pay?

A
Consumer surplus

B
Consumer burden

C
Price gap

D
Optimum price

Solution

Suppose a consumer is willing to pay Rs.10 for a commodity but it's price is Rs.6, we say that consumer's surplus is Rs.4.

As per the concept of consumer surplus, a consumer is in equilibrium where consumer surplus is zero.Referring to above example when price of commodity is Rs.10 and consumer's surplus is zero, the consumer is said to be in equilibrium.
Question 8
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According to the law of diminishing marginal utility, _________?

A
After a point any addition in the consumption causes a reduction in total utility.

B
Additional consumption leads to lower average total utility

C
Additional consumption always yields extra utility

D
Additional consumption always yields negative utility

Solution

As per law of dimnishing marginal utility, as the consumer goes on conuming MU derived from each succesive unit goes on falling,becomes zero and finally turns negative
Question 9
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The want satisfying power of a commodity is known as:

A
Demand

B
Consumption

C
Supply

D
Utility

Solution

utility represents satisfaction experienced by the consumer from a good.
Question 10
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What is called point of satiety?

A
The point where marginal utility becomes greater than zero

B
The point where marginal utility becomes zero.

C
The point where marginal utility becomes less than zero

D
None of above

Solution

Point of Satiety is defined as '' the point where marginal utility of any commodity is zero''. Thus it is a point where satisfaction of any commodity is zero.

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Re-Attempt Weekly Quiz Competition

Consumers Equilibrium and Demand Test - 1

Result

Consumers Equilibrium and Demand Test - 1

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SHARING IS CARING

Question 1

It helps consumers to make choices.

It is a satisfying power of a commodity.

Utility is always measurable.

It is purely a subjective entity.

Solution

Question 2

Independent variable approach

Cardinal utility approach

Ordinal utility approach

None of these

Question 3

Marginal utility

Ordinal utility

Total utility

Average utility

Solution

Question 4

Cardinal approach

Ordinal approach

Both cardinal & ordinal

None of these

Solution

Question 5

Indifference curve

Isoquant

Isocost curve

Marginal utility curve

Solution

Question 6

Downward to the right

Downward to the left

Upward to the right

Upward to the left

Solution

Question 7

Consumer surplus

Consumer burden

Price gap

Optimum price

Solution

Question 8

After a point any addition in the consumption causes a reduction in total utility.

Additional consumption leads to lower average total utility

Additional consumption always yields extra utility

Additional consumption always yields negative utility

Solution

Question 9

Demand

Consumption

Supply

Utility

Solution

Question 10

The point where marginal utility becomes greater than zero

The point where marginal utility becomes zero.

The point where marginal utility becomes less than zero

None of above

Solution

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