MCQs of Economics – Consumer Theory vs. Real Consumers

The limit on the consumption bundles that a consumer can afford is known as

A change in the relative prices of which of the following pair of goods would likely cause the smallest substitution effect?

indifference curves for perfect substitutes are

Suppose a consumer must choose between the consumption of sandwiches and pizza. If we measure the quantity of pizza on the horizontal axis and the quantity of sandwiches on the vertical axis and if the price of a pizza is Rs10 and the price of a sandwich is Rs5, then the slope of the budget constraint is

The slope at any point on an indifference curve is known as

Which of the following statements is not true with regard to the standard properties of indifference curves?

The consumer’s optimal purchase of any two goods is the point where

Which of the following is true about the consumer’s optimum consumption bundle? At the optimum

Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve)

If an increase in a consumer’s income causes the consumer to increase his quantity demand of a good, then the good is

If an increase in a consumer’s income causes the consumers to decrease her quantity demanded of a good, then the good is

Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 If the price of a belt is €10 and the price of a pair of socks is €5, the consumer will choose to buy the commodity bundle represented b point

Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The substitution effect is represented by the movement from point

Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The income effect is represented by the movement from point

Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 A pair of socks is

The change in consumption that results when a price change moves the consumer along a given indifference curve is known as the

If income where to double and prices were to to double the budget line would

If leisure is a normal good, an increase in the wage

If consumption when young and when old are both normal goods, an increase in the interest rate

Which of the following is not true regarding the outcome of a consumer’s optimization process?