Consumer Behavior and Utility Analysis MCQs

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Topic Notes: Consumer Behavior and Utility Analysis

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111

Which economist famously stated that 'Economics remains neutral to objectives'?

112

What is the mathematical formula for the Marginal Rate of Substitution (MRS) between goods X and Y?

113

When is a consumer considered to be in equilibrium, thereby maximizing total utility?

A the proportions of the marginal utilities and respective prices are equal B the consumer feels satisfied with his expenditure on the various goods C the consumer gets full satisfaction from the consumption D the marginal utilities of the two goods consumed are equal

114

In a two-good model (A and B), if the price of A falls and the consumer's income rises, yet the consumption of A decreases while B increases, what economic principle explains this behavior?

A The substitution effect has acquired the predominance of the income effect B Income effect has acquired the predominance of substitution effect C Afterall good B is not a complete replacement of good A D The real income of the consumer has decreased

115

What happens to Total Utility when Marginal Utility remains positive?

116

What is the relationship between total utility and marginal utility when total utility reaches its maximum point?

A Total utility and marginal utility are not inter related B All of the above C When the total utility is maximum, marginal utility is zero D When total utility decreases, marginal utility remains constant

117

Under what conditions does a consumer move to a higher indifference curve in an indifference curve/budget line model?

118

Which economic concept requires an ethical or value judgment to be derived?

119

Under what condition is a consumer considered to be in equilibrium, thereby maximizing total utility?

A The proportion of the marginal utility and the respective price is equal B The consumer is satisfied with his expenditure on various goods C The marginal utility of the two goods consumed is equal D The consumer gets satisfaction from the consumption

120

Under the theory of consumer equilibrium, at what point is a consumer consuming two goods considered to be in equilibrium?

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Topic Notes: Consumer Behavior and Utility Analysis

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