(A) the marginal rate of substitution is constant as you move along an indifference curve.
(B) marginal utility is constant as you move along an indifference curve.
(C) it is convex to the origin.
(D) total utility is greatest where the 45 degree line cuts the indifference curve.
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Economists define an indifference curve as the set of points?
(A) at which the consumer is in equilibrium as the consumer’s income changes.
(B) which yield the same marginal utility.
(C) which yield the same total utility.
(D) At which the consumer is in equilibrium as prices change.
The MUx/MUy ratio is 10 and the Px/Py ratio is 8, so the consumer should buy?
(A) less X and more Y.
(B) more X and more Y.
(C) more X and less Y.
(D) less X and less Y.
A utility-maximising consumer changes her spending on goods X and Y until?
(A) MUx = MUy
(B) Px (MUx) = Py(MUy)
(C) TUx/Px = TUy/Py
(D) MUx (Py) = MUy (Px)
The diamond-water paradox can be explained by suggesting that the price of a product is determined by?
(A) consumer incomes.
(B) its marginal utility.
(C) consumer surplus.
(D) diminishing marginal utility.
A consumer will buy more units of a good if the value of the good’s?
(A) total utility is greater than price.
(B) marginal utility is less than price.
(C) marginal utility is greater than price.
(D) total utility is less than price.
Economists have used the idea of diminishing marginal utility to explain why?
(A) demand curves slope downwards.
(B) demand curves become flatter at lower prices.
(C) demand curves are inelastic.
(D) Both the first and second option.
The equation for Rida’s demand curve for bouquets of flowers is P = 40 – 2Q. If the price of a bouquet is Rs18, her consumer surplus will be?
(A) Rs198
(B) Rs121.
(C) Rs11.
(D) Rs242.