MCQ Consumer Behaviour Class 11th

November 29, 2021

edusingh

Question. Who gave the cardinal concept of utility?

(a) Marshall
(b) Pigou
(c) Hicks
(d) Samuelson

Answer:- (a) Marshall

Question. Consumer’s behavior is studied in?

(a) Micro Economics
(b) Macro Economics
(c) Income Analysis
(d) None of these

Answer:- (a) Micro Economics

Question. Which of the following statement is true ?

(a) Utility means want-satisfying power
(b) Utility is a function of intensity of desire
(c) Desire of consumption gives birth to utility
(d) All of these

Answer:- (d) All of these

Question. Which is the First Law of Gossen?

(a) Law of Demand
(b) Law of Diminishing Marginal Utility
(c) Law of Equi-marginal Utility
(d) Consumer’s Surplus

Answer:- (b) Law of Diminishing Marginal Utility

Question. Which of the following is a characteristic of utility ?

(a) Utility is a psychological phenomenon
(b) Utility is subjective
(c) Utility is a relative concept
(d) All of these

Answer:- (d) All of these

Question. How we calculate marginal utility ?

(a) ∆TU/∆Q
(b) ∆MU/∆Q
(c) ∆Q/∆TU
(d) ∆Q/∆MU

Answer :- (a) ∆TU/∆Q

Question. When TU becomes maximum, MU is:

(a) Positive
(b) Negative
(c) Zero
(d) None of these

Answer :- (c) Zero

Question. Which of the following is true ?

(a) TU increases till MU is positive
(b) TU is maximum when MU is equal to zero
(c) TU declines when MU is negative
(d) All of these

Answer :- (d) All of these

Question. Who basically propounded the concept of Law of Equimarginal Utility ?

(a) Marshall
(b) Gossen
(c) Ricardo
(d) J. S. Mill

Answer :- (c) Ricardo

Question. In difference curve is?

(a) Convex to the origin
(b) Concave to the origin
(c) Both (a) and (b) true
(d) All of these false

Answer :- (a) Convex to the origin

Question. The ability of satisfying human want in a goods is called its?

(a) Productivity
(b) Satisfaction
(c) Utility
(d) Profitability

Answer :- (c) Utility

Question. Utility is related to?

(a) Usefulness
(b) Morality
(c) Satisfaction of human wants
(d) All the above

Answer :- (d) All the above

Question. Utility can be measured by?

(a) Money
(b) Exchange of goods
(c) Weight of the good
(d) None of these

Answer :- (a) Money

Question. Law of Equi-marginal utility is called?

(a) Law of increasing utility
(b) Law of diminishing utility
(c) Law of substitution
(d) None of these

Answer :- (c) Law of substitution

Question. Indifference curve slopes?

(a) From right to left
(b) From left to right
(c) Both (a) and (b)
(d) None of these

Answer :- (b) From left to right

Question. The addition of utilities obtained from all units of a goods is called ?

(a) Marginal Utility
(b) Total Utility
(c) Maximum Satisfaction
(d) Additional Utility

Answer :- (b) Total Utility

Question. Who propounded the ordinal utility theory’ ?

(a) Marshall
(b) Pigou
(c) Hicks and Allen
(d) Ricardo

Answer :- (c) Hicks and Allen

Question. The propounder of law of diminishing marginal utility is:

(a) Gosen
(b) Adam smith
(c) Chapman
(d) Hicks

Answer :- (a) Gosen

Question. Consumer’s equilibrium takes at a point where:

(a) MU = Price
(b) MU < Price
(c) MU > Price
(d) None of these

Answer :- (a) MU = Price

Question. The capability of a commodity to satisfy human wants is?

(a) Consumption
(b) Utility
(c) Quality
(d) Taste

Answer :- (b) Utility

Question. For the maximum satisfaction of consumer?

(a) Marginal utility of a good should be equal to its price.
(b) Marginal utility of a good should be greater than its price.
(c) There is no relation between marginal utility and price.
(d) None of these

Answer :- (a) Marginal utility of a good should be equal to its price.

Question. When marginal utility is negative, then total utility?

(a) is maximum
(b) Starts decreasing
(c) increases at decreasing rate
(d) None of these

Answer :- (b) Starts decreasing

Question.According to the law of equi-marginal utility, the condition for consumer’s equilibrium is?

(a) $\frac{MU_{a}}{P_{a}}$

(b) $\frac{MU_{b}}{P_{b}}$
(c) Both (a) and (b)
(d) Undefined

Answer :- (c) Both (a) and (b)

Question. According to Marshall, utility of a commodity?

(a) Can be measured by money
(b) Cannot be measured by money
(c) Can be measured in cardinal numbers
(c) Both (a) and (b)

Answer :- (c) Both (a) and (b)

Question. Which element is essential for demand ?

(a) Desire to consume
(b) Availability of adequate resources
(c) Willingness to consume
(d) All of these

Answer :- (d) All of these

Question. Demand Curve generally slopes ?

(a) Upward from left to right
(b) Downward from left to right
(c) Parallel to X-axis
(d) Parallel to Y-axis

Answer :- (b) Downward from left to right

Question. In which goods, price fall does not make any increase in demand ?

(a) Necessities Goods
(b) Comfort Goods
(c) Luxuries Goods
(d) None of these

Answer :- (a) Necessities Goods

Question. Which of the following factor affects demand ?

(a) Price
(b) Change in income
(c) Taste of the Consumer
(d) All of these

Answer :- (d) All of these

Question. Goods, which can alternatively be used, are called?

(a) Complementary Goods
(b) Substitutes
(c) Comforts
(d) None of these

Answer :- (b) Substitutes

Question. Law of Demand is a:

(a) Qualitative Statement
(b) Quantitative Statement
(c) Both (a) and (b)
(d) None of these

Answer :- (a) Qualitative Statement

Question. Which of the following is a demand function ?

(a) PX
(b) DX = PX
(c) Dx = f(Px)
(d) None of these

Answer :- (c) Dx = f(P_x)

Question. When change in the price of goods-X affects the demand of goods-Y, this demand is called?

(a) Price Demand
(b) Income Demand
(c) Cross Demand
(d) All of these

Answer :- (c) Cross Demand

Question. For normal goods, Law of Demand states the relationship between price and quantity of goods?

(a) Direct
(b) Positive
(c) Indirect
(d) None of the above

Answer :- (c) Indirect

Question. Which of the following is a reason for fall in demand ?

(a) Fall in Income
(b) Fall in Number of Buyers
(c) Fall in Taste of Consumer
(d) All the above

Answer :- (d) All the above

Question. With rise in coffee price, the demand of tea ?

(a) Rises
(b) Falls
(c) Remains stable
(d) None of these

Answer :- (a) Rises

Question. Contraction in demand appears when ?

(a) Price rises and demand falls
(b) Price rises and demand also rises
(c) Price remains stable and demand falls
(d) Price falls but demand remains stable

Answer :- (a) Price rises and demand falls

Question. Which is a reason of change in demand ?

(a) Change in consumer’s income
(b) Change in price of related goods
(c) Population increase
(d) All pf these

Answer :- (d) All pf these

Question. For a change in which of the following, there is no change in demand ?

(a) Chan g-e in price
(b) Change in income
(c) Change in taste and fashion
(d) None of these

Answer: (d) None of these

Question. With a rise in price the demand for ‘Griffin’ goods?

(a) increases
(b) decreases
(c) remains constant
(d) becomes unstable

Answer: (a) increases

Question. He slope of the demand Curve of a normal goods is ?

(a) Negative
(b) Positive
(c) Zero
(d) Undefined

Answer: (a) Negative

Question. With an increase in income consumer decreases the consumption of which goods ?

(a) Inferior goods
(b) Normal goods
(c) Griffin goods
(d) Both (a) and (b)

Answer: (c) Griffin goods

Question. The demand curve of a good shifts from DD’ to dd
(a) fail in the price of the goods
(b) rise in the price of the goods
(c) rise in the price of substitute goods
(d) rise in the price of complementary goods

Answer: (c) rise in the price of substitute goods

Question. Elasticity of demand is a ?

(a) Qualitative Statement
(b) Quantitative Statement
(c) Both (a) and (b)
(d) None of the above

Answer: (b) Quantitative Statement

Question. Which of the following is a formula for measuring the elasticity of demand ?

Answer: (a)

Question. For Griffin goods, price elasticity of demand is ?

(a) Negative
(b) Positive
(c) Zero
(d) None of these

Answer: (b) Positive

Question. Following figure shows?

(a) High Elastic Demand
(b) Perfectly Elastic Demand
(c) Perfectly Inelastic Demand
(d) Inelastic Demand

Answer: (b) Perfectly Elastic Demand

Question. Which of the following shows elasticity less than one ?

(a) Necessity Goods
(b) Comforts
(c) Luxuries
(d) All of these

Answer: (a) Necessity Goods

Question. With which method, elasticity of demand is measured ?

(a) Total Expenditure Method .
(b) Percentage or Proportionate Method
(c) Point Method
(d) All of these

Answer: (d) All of these

Question. Elastic demand is shown by ?

Answer: (a) $\frac{\Delta Q}{Q}> \frac{\Delta P}{P}$

Question. What is the price elasticity in following example ?

(a) -2.5
(b) + 3.5
(c) + 4.0
(d) None of these

Answer: (a) -2.5

Question. Who propounded the percentage or proportionate method of measuring elasticity of demand ?

(a) Marshall
(b) Flux
(c) Hicks
(d) None of these

Answer: (b) Flux

Question. Which of the following factor affects elasticity of demand ?

(a) Nature of Goods
(b) Price Level
(c) Income Level
(d) All of these

Answer: (d) All of these

Question. How many types elasticity of demand has ?

(a) Three
(b) Five
(c)Six
(d) Seven

Answer: (b) Five

Question. Elasticity of demand for necessities is ?

(a) Zero
(b) Unlimited
(c) Greater than unity
(d) Less than unity

Answer: (a) Zero

Question. Price elasticity of demand means ?

(a) Change in demand due to change in price
(b) Change in demand
(c) Change in real income
(d) Change in Price

Answer: (a) Change in demand due to change in price

Question. The elasticity of demand at the mid-point of a straight line demand curve ?

(a) will be zero
(b) will be unity
(c) will be infinity
(d) None of these

Answer: (b) will be unity

Question. If the demand for a good changes by 60% due to 40% change in price, the elasticity of demand is ?

(a) 0.5
(b) -1.5
(c) 1
(d) zero

Answer: (b) -1.5

Question. For luxury goods the demand is ?

(a) Inelastic
(b) Elastic
(c) Highly elastic
(d) Perfectly Inelastic

Answer: (c) Highly elastic

Question. Any statement about demand for a good is considered complete only when the following is/are mentioned in ?

(a) Price of the good
(b) Quantity of the good
(c) Period of time
(d) All of these

Answer: (a) Price of the good

Question. Consumer is in equilibrium when ?

(a) MUx = PUx
(b) MUx > PUx
(c) MUx < Px

(d) MUx ÷ Px

Answer: (a) MUx = PUx

Question. Marshall has given the law of Equimarginal utility related ?

(a) Related to goods
(b) Related to money
(c) In relation to both
(d) None of these.

Answer: (a) Related to goods

Question. How many tremendous curves can touch the budget line ?

(a) One
(b) Two
(c) Several
(d) Depends on the basis of indifference maps.

Answer: (a) One

Question. Indifference curves were first introduced by the English economist in 1881 by ?

(a) Edge worth
(b) Pareto
(c) Myers
(d) Hicks.

Answer: (a) Edge worth

Question. Any statement about the demand of an object is considered complete when it is mentioned in the following ?

(a) Price of good
(b) Demand of good
(c) Time period
(d) All of the above.

Answer: (d) All of the above

Question. If price of goods ‘X’ falls leading to increase in demand of goods ‘ Y’ then both the goods are ?

(a) Substitute goods
(b) Complementary goods
(c) Not related
(d) Competitor.

Answer: (b) Complementary goods

Question. According to total outlay method, the demand of a good is inelastic when ?

(a) Price will fall with the increase in amount spent
(b) When price of good decreases and money spent decreases
(c) Expenditure remains the same, even if price falls
(d) Expenditure decreases with the increase in price.

Answer:

Question. Total utility is maximum when :

(a) Marginal utility is maximum
(b) Marginal utility is Zero
(c) Average utility is maximum
(d) Average utility is Zero

Answer: (b) Marginal utility is Zero

Question. An indifference curve is always :

(a) Concave to the origin
(b) Convex to the origin
(c) L-shaped
(d) A vertical straight line

Answer: (b) Convex to the origin

Question. Marginal utility curve of a consumer is also his:

(a) Indifference curve
(b) Total utility curve
(c) Supply curve
(d) Demand curve

Answer: (d) Demand curve

Question. At equilibrium, the slope of the indifference curve is?

(a) Equal to the slope of budget line
(b) Greater than the slope of budget line
(c) Smaller than the slope of budget line

Answer: (a) Equal to the slope of budget line

Question. The law of equi marginal utility considers price of money as?

(a) zero
(b) less than one
(c) more than one
(d) one

Answer: (d) one

Question. Marginal utility approach was given by?

(a) J.R. hicks
(b) Alfred Marshall
(c) Robbins
(d) A.C. Pigou

Answer: (b) Alfred Marshall

Question. Indifference curves between income and leisure for an individ

(a) Concave to the origin
(b) Convex to the origin
(c) Negatively sloped straight lines
(d) Positively sloped straight lines

Answer: (d) Positively sloped straight lines

Question. In case of a right angled indifference curve the goods are:

(a) Perfect complements
(b) Prefect substitutes
(c) Inferior goods
(d) Giffen good

Answer: (a) Perfect complements

Question.Indifference curves never intersect each other due to:

(a) Different levels of satisfaction
(b) Same levels of satisfaction
(c) Convex to origin(d) Concave to origin

Answer: (a) Different levels of satisfaction

Question.When TU is maximum then MU is?

(a) Zer(b) Negative
(c) Both
(d) None.

Answer: (a) Zero

Question. When marginal utility from the consumption of a commodity is zero, then the:

(a) Total utility is zero
(b) Total utility is highest
(c) Total utility is rising
(d) Total utility is falling

Answer: (b) Total utility is highest

Question. Which economist said that money is the measuring rod of utility?
(a) (a)C Pigou
(b) Alfred Marshall
(c) Adam Smith
(d) Robbins

Answer: (b) Alfred Marshall

Question. The law of equi marginal utility considers price of money as:

(a) Zero
(b) Less than one
(c) More than one
(d) One

Question. (d) One

Question. Indifference curves are

(a) Convex to Origin
(b) Concave
(c) Neither ‘a’ nor ‘b’
(d) None

Answer: (a) Convex to Origin

Question. At equilibrium, the slope of the indifference curve is:

(a) Equal to the slope of budget line
(b) Greater than the slope of budget line
(c) Smaller than the slope of budget line
(d) None

Answer: (a) Equal to the slope of budget line

Question.Indifference curves never intersect each other due to:

(a) Different levels of satisfaction
(b) Same levels of satisfaction
(c) Convex to origin
(d) Concave to origin

Answer: (a) Different levels of satisfaction

Question. Total utility is maximum when :

(a) Marginal utility is maximum
(b) Marginal utility is Zero
(c) Average utility is maximum
(d) Average utility is Zero

Answer: (b) Marginal utility is Zero

Question.A book “The Nature and significance of Economic Science” is written by:

(a) Alfred Marshal
(b) Lionel Robbins
(c) Samuelson
(d) Adam Smith

Answer: (b) Lionel Robbins

Question.Health is not wealth because it has no:

(a) Scarcity
(b) Utility
(c) Marketability
(d) None of these

Answer: (c) Marketability

Question.The law of equi-marginal utility is otherwise called as:

(a) Law of substitution
(b) Law of diminishing MU
(c) Law of negative returns
(d) None of these

Answer: (a) Law of substitution

Question.In case of perfectly elastic demand, demand curve becomes:

(a) Horizontal
(b) Vertical
(c) Downward sloping
(d) None of these

Answer: (a) Horizontal

Question.In case of perfectly elastic demand, the value of Ed is:

(a) One
(b) Greater than one
(c) Less than one
(d) Infinite

Answer: (d) Infinite

Question. Which of the following is the most valuable piece of information for determining the social class of your best friend’s parents?

(a) The number of years schooling that they had
(b) Their ethnic backgrounds
(c) Their combined annual income
(d) Their occupations

Answer: (d) Their occupations

Question. The starting point in understanding how consumers respond to various marketing efforts the company might use is the:

(a) Lipinski model of buying behavior.
(b) Stimulus-response model of buyer behavior.
(c) Freudian model of buying behavior.
(d) Maslow’s model of life-cycle changes.

Answer: (b) Stimulus-response model of buyer behavior.

Question.According to Maslow’s Hierarchy of Needs, the lowest order of needs are called:

(a) Self-actualization needs.
(b) Social needs.
(c) Safety needs.
(d) Physiological needAnswer: (d) Physiological needs

Question. With respect to post purchase behavior, the larger the gap between expectations and performance:

(a) The greater likelihood of re-purchase.
(b) The greater the customer’s dissatisfaction.
(c) The less likely the consumer will be influenced by advertising
(d) The less likely the consumer will need sales confirmation and support.

Answer: (b) The greater the customer’s dissatisfaction.

Question. All of the following are part of the adoption process that consumers may go through when considering an innovation EXCEPT:

(a) Awareness.
(b) Process.
(c) Interest.
(d) Trial.

Answer: (b) Process.

Question. The demand for necessaries is:

(a) Elastic
(b) Inelastic
(c) Unitary elastic
(d) Perfectly elastic

Answer: (b) Inelastic

Question. In case of perfectly elastic, demand curve is:

(a) Vertical
(b) Horizontal
(c) Downward sloping
(d) None of these

Answer: (b) Horizontal

Question. The demand for commodity on which a consumer spends more percentage of his income is:

(a) More elastic
(b) Less elastic
(c) Unity
(d) None of these

Answer: (a) More elastic

Question. Consumer Surplus is based on which concept?

(a) Diminishing Marginal Utility
(b) Law of Demand
(c) Indifference curve Approach
(d) None

Answer: (a) Diminishing Marginal Utility

Question. An indifference curve is always:

(a) Concave to the origin
(b) Convex to the origin
(c) L-shaped
(d) A vertical straight line

Answer: (b) Convex to the origin

Question. Which of the following statement regarding utility is not tr(a) It is the want satisfying power of the commodity

(b) Utility is measurable

(d) It is purely a subjective entity

Answer: (b) Utility is measurable

Question. Which of the following utility approach is based on the theory of Alfred Marshell?

(a) Ordinal utility approach

(b) Cardinal utility approach

(d) None of the above

Answer: (b) Cardinal utility approach.

Question. Which utility is added to the total utility by consuming one additional unit of the commodity?

(a) Ordinal Utility

(b) Total Utility

(d) Average Utility

Answer: (c) Marginal Utility

Question. The price line or budget line of a consumer is

(a) Parallel to x-axis

(b) Parallel to y-axis

(d) None of the above.

Answer:- (a) Parallel to x-axis

Question.Worth a rupee to a consumer is called:

(a) marginal utility of money

(b) total utility of money

(d) consumer’s equilibrium

Answer:- (a) marginal utility of money

Question. A consumer attains equilibrium, in case of one commodity, when:

(a) MUx= Px

(b) MUx>Px

(d) MUx/px = muy/py = MUm

Answer: (c) MUxMUy/Py

Question. A consumer reaches the point of equilibrium when;

(a) MRSxy>Px/Py

(b)MRSxy<Px/Py

(c)MRSxy = Px/Py

(d) none of these

Answer:- (c) MRSxy = Px/Py

Question. A consumer will start buying less of good-X and more of Good-Y, when:

(a) MU_x/Px = MUm

(b) MU_x/Px<MUy/Py

(d)MU_x/Px>MU_y/Py

Answer :- (b) MU_x/Px<MUy/Py

Question. According to IC approach, at the point of equilibrium:

(a) slope of IC > slope of price line

(b) slope of IC < slope of price line

(d) slope of IC = slope of price line

Answer:- (d) slope of IC = slope of price line

Question. when rupee worth of satisfaction is greater for Y than x, it implies that?

(a) MUx/Px = MUy/py

(b) MUx/Px>MUy/Py

(d) none of these

Answer:- (c) MUx/Px<MUy/py

Question. in the case of mux>muy/py;

(a) Consumer will shift some expenditure from x to y
(b) Consumer will shift some expenditure from y to x
(c) Consumer will spend less on both x and y
(d) Consumer will spend x and y

Answer : (b) Consumer will shift some expenditure from y to x

Question. Additional utility derived from the consumption of an additional unit of a commodity is called:

(a) Average utility

(b) total utility

(d) none of these

Answer: (c)Marginal utility

Question. the slope indifference curve is equal to:

(a) One

(b) marginal rate of substitution

(d) none of these

Answer: (b) marginal rate of substitution

Question. Why is indifference curve convex to origin?

(a)Due to law of diminishing marginal utility
(b) Due to monotonic preferences
(c) Due to continuous decline of marginal rate of substitution
(d) Both a and b

Answer: (c) Due to continuous decline of marginal rate of substitution

Question. it is the property of indifference curve that no two IC can intersect each other.
The reason behind this is:

(a) Consumer preferences are monotonic

(b) Preferences are complete

(d) Diminishing marginal rate of substitution

Answer:- (c) Same combination of two goods cannot give different level of satisfaction

Question. Slope of budget line is:

(a)Px/Py

(b)Py/Px

(d)Px.Py

Answer: (a) Px/Py

Question. Which of the following is not the property of indifference curve:

(a)Higher the indifference curves higher the level of satisfaction.
(b)Two indifference curves cannot intersect each other
(c)Indifference curve is concave to origin
(d)Indifference curve is downward sloping

Answer: (c) Indifference curve is concave to origin

Question. An Indifference curve slope down towards right since more of one commodity
and less of another result in:

(a) Same satisfaction.
(b)Greater satisfaction.
(c)Maximum satisfaction.
(d)Decreasing expenditure.

Answer: (a) Same satisfaction.

Question. Hicks and Allen believed that utility:

(a) Cannot be measured
(b)Cannot be expressed
(c) Can be measured in cardinal numbers
(d) Can be measured in ordinal numbers

Answer: (d) Can be measured in ordinal numbers

Question .Which of these bundles can form an indifference curve?

(a) Bundle 1

(b) Bundle 2

(d) any of the above.

Answer: (c) Bundle 3

Question. An indifference curve is related to:

(a) Consumer’s income

(b) prices of goods X and Y

(d) choices and preferences of consumer

Answer: (d) choices and preferences of consumer

Question. As we move down the indifference curve left to right, the slope of indifference
curve tends to:

(a) Unity

(b) rise

(d) declines

Answer: (d) declines

Question. A shift in budget line, when prices are constant, is due to:

(a) Change in demand

(b) change in income

(c)Change in preferences

(d) change in utility

Answer: (b) change in income

Question. Marginal rate of substitution of X for Y is calculated as:

(a)Px/Py

(b)Py/Px

(d) change in X/ change in Y

Answer :- (c) Change in Y / change in X

Question. A set of ICs drawn in a graph is called:

(a) Indifference curve

(b)indifference map

(c)budget line

(d) all of these

Answer: (b) indifference map

Question.. Inindifference map, higher IC indicates:

(a) Lower level of satisfaction

(b) same level of satisfaction

(d) eitherhigher orsame level of satisfaction

Answer: (c) Higher level of satisfaction

Question. MRS is determined by:

(a) satisfaction level of the consumer

(b) income of the consumer

(d) preferences the consumer

Answer: (d) preferences the consumer

Questio. At the point of equilibrium:

(a) MRS>Px/Py and IC is convex at the point of equilibrium
(b) MRS<Px/Py and IC is convex at the point of equilibrium
(c) MRS=Px/Py
(d) MRS>Px/Py and IC is convex at the point of equilibrium

Answer:- (d) MRS>Px/Py and IC is convex at the point of equilibrium

Questio. In a situation when MRS>Px/Py, the consumer would react by:

(a) Diminishing the consumption of commodity-x
(b)Increasing the consumption of commodity-y
(c) Increasing the consumption of commodity-x
(d) None of these

Answer: (c) Increasing the consumption of commodity-x

Question. Two indifference curves cannot cut each other because:

(a) They slope downwards

(b) They are convex to origin

(d) Each indifference curve represents a different level of satisfaction

Answer: (d) Each indifference curve represents a different level of satisfaction

Question. specific quantity to be purchased against a specific price of the commodity is
called:

(a) Demand

(b) quantity demand

(d) shift in demand

Answer: (b) quantity demand

Question.Thegraphic presentation of atable showing price and relationship[ for a
commodity in the market is called:

(a)Individual demand curve

(b) producer’s demand curve

(d) consumer’s demand curve

Answer: (c) Market demand curve

Question. When at price of Rs. 5per unit of a commodity, A’s demand is for 11 units, B’s demand is for Question. units and C’S demand is for 8 units, then market demand will be:

(a) 11 units

(b) Question. units

(d) 33 units

Answer: (d) 33 units

Question. Downward slope of the demand curve shows:

(a) positive relationship between price and quantity demanded
(b) inverse relationship between price and quantity demanded
(c) no relationship between price and quantity demanded
(d) none of these

Answer: (b) inverse relationship between price and quantity demanded

Question.How are two goods (apple and orange) related when, as a result of rise in the price of apples, demand for oranges increases?

(a) substitute goods

(b) complementary goods

(d) inferior goods

Answer: (a) substitute goods

Question. In case of normal goods, demand curve shows:

(a) a negative slope

(b) a positive slope

(d) none of these

Answer: (a) a negative slope

Question. Law of demand must fail in case of:

(a) normal good s

(b) giffen goods

(d)none of these

Answer: (b) giffen goods

Question. Inferior goods are those whose income effect is:

(a) negative

(b) positive

(c)zero

(d) none of these

Answer: (a) negative

Question. Which of the following pairs represents substitute goods?

(a) car and petrol

(b) juice and cold drink

(d) all of these

Answer: (b) juice and cold drink

Question.In case of Giffen’s paradox, the slope of demand curve is:

(a) negative

(b) positive

(d) parallel to Y-axis

Answer: (b) positive

Question. As a result of rise in consumer’s income, demand curve for coarsegrain(inferior good):

(a) becomes a horizontal straight line

(b) becomes a vertical straight line

(d) shifts to the left

Answer: (d) shifts to the left

Question. If two goods are complementary then rise in the price of one results in:

(a) rise in demand for the other

(b) fall in demand for the other

(d) none of these

Answer: (b) fall in demand for the other

Question. Demand curve is upward sloping for:

(a) normal goods

(b) inferior goods

(d) none of these

Answer: (c) giffen goods

Question. Movement along the demand curve occurs due to change in:

(a) own price of the commodity
(b) determinants of demand, other than own price of the commodity
(c) both (a) and (b)
(d) none of these

Answer: (a) own price of the commodity

Question. An increase in the price of electricity will cause the demand for electric appliances to:

(a) rise

(b) fall

(d) none of these

Answer :- (b) fall

Question. Shift in demand curve means:

(a)fall in demand due to rise in own price of the

(b) rise in demand due to fall in own price of the

(d) none of these

Answer: (c) change in demand due to factors other than own price of the commodity

Question. A fall in income of the consumer (in case of normal goods) will cause:

(a) upward movement on the demand curve

(b) downward movement on the demand curve

(d) leftward shift of the demand curve

Answer: (d) leftward shift of the demand curve

Question. Change in quantity demanded of a commodity due to change in its own price,other things remaining constant, is called:

(a) cross price effect

(b) price effect

(d) substitution effect

Answer: (b) price effect

Question. In case of contraction of demand, we move:

(a) from lower point to upper point on the same demand curve
(b) to right on the another demand curve
(c) from upper point to lower point on the same demand curve
(d) to left on the another demand curve

Answer: (a) from lower point to upper point on the same demand curve

Question. Increase in demand occurs due to:

(a) decrease in price of the complementary good
(b) increase in income of the consumer
(c) increase in price of the substitutes
(d) all of these

Answer: (d) all of these

Question. Assumptions of the law of demand refer to:

(a) constant own price of the commodity
(b) determinants of demand, other than own price of the commodity
(c) constant cost of production
(d) none of these

Answer: (b) determinants of demand, other than own price of the commodity

Question. Law of demand is violated when:

(a) income effect is negative
(b) substitution effect is negative
(c) negative income effect is greater than substitution effect
(d) negative income effect is less than substitution effect

Answer: (c) negative income effect is greater than substitution effect

Question. A fall in own price of the commodity leads to:

(a) increase In real income of the consumer
(b) decrease in real income of the consumer
(c) increase in purchasing power of the consumer
(d) both (a) and (c)

Answer: (d) both (a) and (c)

Question. Substitution effect takes place when price of the commodity becomes:

(a) relatively cheaper

(b) relatively dearer

(d) both (a) and (b)

Answer: (d) both (a) and (b)

Question. Different quantities purchased at different possible prices of a commodity is called:

(a) demand schedule

(b) quantity demanded

(d) individual demand

Answer: (a) demand schedule

Question.

Diagrammatic presentation of demand schedule of an individual buyer of a commodity in the market fields:

(a) market demand schedule

(b) individual demand curve

(d) market demand curve

Answer: (b) individual demand curve

Question. Goods are un demanded because these possess:

(a) utility

(b) capacity

(d) none of these

Answer: (a) utility

Question. Complementary goods:

(a) complete the demand for each other

(b) are substituted for each other

(d) both (a) and (c)

Answer: (d) both (a) and (c)

Question.. In case of normal goods, the relationship between income and quantity demanded is:

(a) negative

(b) positive

(d) infinite

Answer: (b) positive

Question. In case of normal goods, the relationship between own price of the commodity and its quantity demanded is:

(a) constant

(b) inverse

(d) none of these

Answer:- (b) inverse

Question. An exception to the law of demand is:

(a) normal good

(b) Giffen good

(d) both (b) and (c)

Answer: (d) both (b) and (c)

Question. Distribution of income is a determinant of:

(a) individual demand function

(b) market demand function

Answer: (b) market demand function

Question. In case of giffen goods, demand curve is:

(a) upward sloping

(b) downward sloping

(d) parallel to Y-axis

Answer: (a) upward sloping

Question. When increase in the price of one good causes an increase in demand for the other, the goods are

(a) substitutes

(b) complementary

(d) giffen

Answer: (a) substitutes

Question. In case of inferior goods:

(a) income effect is negative

(b) income effect of positive

(d) none of these

Answer: (a) income effect is negative

Question. Shift in demand curve occurs when demand for a commodity changes due to change in:

(a) own price of commodity

(b) determination of demand, other than own price of the commodity

(d) none of these

Answer: (b) determination of demand, other than own price of the commodity

Question.. Change in quantity demanded of a commodity due to change in real income of the consumer caused by change in own price of the commodity is called:

(a) cross price effect

(b) price effect

(d) substitution effect

Answer: (c) income effect

Question. When income of the consumer rises in case of a normal good:

(a) demand curve shifts to the left
(b) demand curve shifts to the right
(c) there is upward movement along the demand curve
(d) there is downward movement along the demand curve

Answer: (b) demand curve shifts to the right

Question. An increase in the price of computer will cause the demand for internet services to:

(a) rise

(b) remain the same

(d) none of these

Answer: (c) fall

VERY SHORT QUE /AN

Question. How is total utility derived from the marginal utility?

Answer :- The total utility is the total sum of marginal utilities of different unit of goods.
TUn = MU1+MU2+MU3———–MUn

Question. An individual bought 50 units of a product at Rs. 4 per unit. When the price falls by 25% it demand rises to 100 unit. Find the price elasticity of demand.

Answer :- Elasticity of demand is 4.

Question. Which curve shows the various combination of two products that give the same amount of satisfaction to the consumer?

Answer: Indifference Curve

Question. Define Utility.

Answer: The “Utility” in economics determines the satisfaction received or expected to be acquired from the consumption of product and services.

Question. State the law of equi-marginal utility.

Answer: The law of equi-marginal utility refers to a balanced position where a consumer distributes his income between different goods in such a way that the value derived from the last rupees is the same as the first one.

Question. What will be the MU when TU is maximum?

Answer: The MU will be zero when TU is maximum.

Question. What is the reason behind a convex indifference curve?

Answer: The reason behind a convex indifference curve is the diminishing marginal rate of substitution.

Question. Which direction the indifference curve slope?

Answer: The indifference curve slopes downward to the right.

Question. What is a consumer surplus?

Answer: Consumer surplus is defined as the difference between what the consumer wants to pay for a product and what he actually pays.

Question. What does the law of diminishing utility say?

Answer: The law of diminishing utility says any addition in the consumption causes a decrease in total utility.

Question. What is the point of satiety?

Answer: The point of satiety is when the marginal utility becomes zero.

Question.. The quantity demanded of a good at a price of Rs. 10 per unit is 40 units. Its price elasticity of demand is -2. Its pricfalls by Rs, 2/- per unit. Calculate its quantity demanded at the new price.

Answer: 56 units.

Question.. Price elasticity of demand for flour is equal to unity and a household demands 40kg of flour when the price is Rs. 1 per kg. At what price will the houysehold demand 36 kg of flour.

Answer: The cost of the flour rises to Rs. 1.10 per kg.

Question.. State the proportionate /percentage methods of evaluating price elasticity of demand?

Answer: Proportionate / percentage method:

FILL IN BLANKS

Question. _____ shows various combinations of two products that give same amount of satisfaction ?

(a) ISO cost curve
(b) Indifference curve
(c) Marginal utility curve
(d) ISO quant

Answer: (b) Indifference curve

Question. _____ shows various combinations of two products that give same amount of satisfaction ?

(a) ISO cost curve
(b) Indifference curve
(c) Marginal utility curve
(d) ISO quant

Answer:

Question. Marshallian utility analysis is known as ________.

(a) Cardinal
(b) Ordinal
(c) Classical
(d) Historical

Answer: (A) Cardinal

Question. For the marketing manager, social class offers some insights into consumer behavior and is potentially useful as a ___________________.

(a) Market research information
(b) Market segmentation variable
(c) Source of understanding competition’s strategy
(d) Source to predict future trends

Answer: (A) Market research information

Question. The reason that higher prices may not affect consumer buying is _______________.

(a) Most consumers prefer brand names which have higher prices
(b) 70% of the total population looks for quality services and is willing to pay higher prices
(c) Consumers believe that higher prices indicate higher quality or prestige
(d) Most consumers feel that the price is actually affordable

Answer: (A) Most consumers prefer brand names which have higher prices

Question. Secondary reference groups include ________________.

(a) Family and close friends
(b) Sports groups
(c) Ethnic and religious groups
(d) Fraternal organizations and professional associations.

Answer: (C) Ethnic and religious groups

Question. ———— is nothing but willingness of consumers to purchase products and services as per their taste, need and of course pocket.

(a) Consumer behavior
(b) Consumer interest
(c) Consumer attitude
(d) Consumer perception

Answer: (B) Consumer interest

Question. ________________ is one of the most basic influences on an individual’s needs, wants, and behavior.

(a) Brand
(b) Culture
(c) Product
(d) Price

Answer: (B) Culture

Question. _____________ (is) are transmitted through three basic organizations: the family, religious organizations, and educational institutions; and in today’s society, educational institutions are playing an increasingly greater role in this regar(d)

(a) Consumer feedback
(b) Marketing information systems
(c) Market share estimates
(d) Cultural values.

Answer: (D) Cultural values

Question. Marketing managers should adapt the marketing mix to _________and constantly monitor value changes and differences in both domestic and global markets.

(a) Sales strategies
(b) Marketing concepts
(c) Cultural values
(d) Brand images.

Answer: (C) Cultural values

Question. _________________ refers to the buying behavior of final consumers.

(a) Consumer buyer behavior.
(b) Target market buying
(c) Market segment buying
(d) Business buying behavior

Answer: (A) Consumer buyer behavior.

Question.. Marketers are always trying to spot ____________ in order to discover new products that might be wante(d)

(a) opinion graphers
(b) dissonant groups
(c) cultural shifts
(d) benchmarks

Answer: (C) cultural shifts

Question.. Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors are called__________

(a) Cultures.
(b) Subcultures.(c) Social classes.
(d) Social factors.

Answer: (C) Social classes.

Question.. Even though buying roles in the family change constantly, the ___________ has traditionally been the main purchasing agent for the family.

(a) Wife
(b) husband
(c) teenage children
(d) grandparent

Answer: (A) Wife

Question.. A ______________ is a person’s pattern of living as expressed in his or her activities, interests, and opinions.

(a) role
(b) status
(c) position
(d) lifestyle

Answer: (D) lifestyle

Question.. The basic premise of the _____________ is that people’s possessions contribute to and reflect their identities; that is, “we are what we have.”

(a) lifestyle concept
(b) self-concept
(c) personality concept
(d) cognitive concept

Answer: (B) self-concept

Question.. A ___________ is a strong internal stimulus that calls for action.

(a) Drive
(b) cue
(c) response
(d) perception

Answer:( A) Drive

Question. ___________ puts people into a frame of mind of liking or disliking things, of moving toward or away from them.

(a) A rule
(b) An attitude.
(c) A belief
(d) A cue.

Answer: (B) An attitude.

Question. The stage in the buyer decision process in which the consumer is aroused to search for more information is called____________

(a) Information search.
(b) Evaluation of alternatives
(c) Search for needs
(d) Perceptual search

Answer: (A) Information search.

Question. Several characteristics are especially important in influencing an innovation’s rate of adoption. _________ is the degree to which the innovation may be tried on a limited basis.

(a) Relative advantage
(b) Synchronization
(c) Compatibility
(d) Divisibility.

Answer: (D) Divisibility.

Question. The business marketer normally deals with _____________ than the consumer marketer does.

(a) far greater but smaller buyers
(b) far greater and larger buyers
(c) far fewer but far larger buyers
(d) far fewer and smaller buyers

Answer: (C) far fewer but far larger buyers

Question. The place in the business buying behavior model where interpersonal and individual Influences might interact is called the__________

(a) Environment.
(b) Response.
(c) Stimuli.
(d) Buying center.

Answer: (B) Response

Question. Consumer is a …………. human being.

Answer: Rational

Question. If the price of substitute goods increases then the demand curve shifts to the ………….

Answer: Right

Question. …………. propounded the law of Diminishing Returns.

Answer: Gossen

Question. According to Marshall utility can be measured in terms of ………….

Answer: Money

Question. An indifference curve gives …………. level of satisfaction to the consumers.

Answer: Equal

Question. Car and Petrol are goods ………….

Answer: Substitute

Question. Utility is an intensive assumption.

Answer: True

Question. The proportion of the cost of two goods measures the slope of budget line.

Answer: True

Question. Demand curve is generally negative sloped.

Answer: False

Question. Budget set is a collection of all bundles that a consumer purchases from their income at market prices.

Answer: True

Question. The elasticity of the demand of the object and the expenditure on the object is closely related.

Answer: True

Utility is an intensive assumption.

Answer: True

Question. The proportion of the cost of two goods measures the slope of budget line.

Answer: True

Question. Demand curve is generally negative sloped.

Answer: False

Question. Budget set is a collection of all bundles that a consumer purchases from their income at market prices.

Answer: True

Question. The elasticity of the demand of the object and the expenditure on the object is closely related.

Answer: True

Utility is an intensive assumption.

Answer: True

Question. The proportion of the cost of two goods measures the slope of budget line.

Answer: True

Question. Demand curve is generally negative sloped.

Answer: False

Question. Budget set is a collection of all bundles that a consumer purchases from their income at market prices.

Answer: True

Question. The elasticity of the demand of the object and the expenditure on the object is closely related.

Answer: True

There is …………. relation between price and demand.

Answer: inverse

State true or false:

1. Utility is an intensive assumption.

Answer: True

Question. The proportion of the cost of two goods measures the slope of budget line.

Answer: True

Question. Demand curve is generally negative sloped.

Answer: False

Question. Budget set is a collection of all bundles that a consumer purchases from their income at market prices.

Answer: True

Question. The elasticity of the demand of the object and the expenditure on the object is closely related.

Answer: True

Utility is an intensive assumption.

Answer: True

Question. The proportion of the cost of two goods measures the slope of budget line.

Answer: True

Question. Demand curve is generally negative sloped.

Answer: False

Question. Budget set is a collection of all bundles that a consumer purchases from their income at market prices.

Answer: True

Question. The elasticity of the demand of the object and the expenditure on the object is closely related.

Answer: True

Match the following:

‘A”	‘B’
1. Inelastic	(a) Utility analysis
2. Substitute goods	(b) Demand of Necessary or Essential goods
3. Marshall	(c) Gossen’s second law
4. Indifference curve	(d) Cross demand
5. Law of equi marginal utility	(e) Does not cut each ether

Answer:

‘A”	‘B’
1. Inelastic	(b) Demand of Necessary or Essential goods
2. Substitute goods	(d) Cross demand
3. Marshall	(a) Utility analysis
4. Indifference curve	(e) Does not cut each ether
5. Law of equi marginal utility	(c) Gossen’s second law

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