Free Consumer Behaviour 03 Practice Test - 11th Grade - Commerce
Question 1
The limits imposed on household choices by income, wealth, and product prices are captured by the
SOLUTION
Solution : A
Budget constraint captures the limits imposed on household choices by income, wealth, and product prices.
Question 2
If production possibility frontier is linear it implies
SOLUTION
Solution : A
If the shape of the PPF curve is a straight-line, the opportunity cost is constant as production of different goods is changing.
Question 3
Which of the following is not concerned with the problem of choice
SOLUTION
Solution : B
The problem of choice is concerned with how limited resources are rationally allocated to alternative uses when consumers and producers have unlimited wants.
Question 4
The economizing problem involves the allocation of resources among competing wants. There is an economizing problem because there are:
unlimited wants
limited resources
both A and B
neither A nor B
SOLUTION
Solution : C
Both A and B. Economic problem is the problem of choice. It arises because resources are scarce and have alternative uses.
Question 5
Concavity of PPC implies:
SOLUTION
Solution : A
Concavity of PPC always implies increasing slope.
Question 6
Diagrammatic presentation of consumer's indifference set is called
SOLUTION
Solution : A
An indifference curve is a locus of all such points, which show different combinations offering the same level of satisfaction to the consumer. It is always related to the choice and preference of the consumer.
Question 7
When onion price hits hard, the poor man simply stops buying it. Which one of these is the correct explanation for this?
SOLUTION
Solution : A
A consumer buys a commodity only when a rupee spent on it yields rupee worth of satisfaction (MUM). A poor man stops the consumption of onion when he finds that a rupee spent on it does not yield rupee worth of satisfaction (no matter what quantity of onions is purchases), so that, Mux/PX<MuM.
Question 8
The shape of transformation curve is changed by
SOLUTION
Solution : C
The shape of transformation curve is changed by marginal opportunity cost.
Question 9
Marginal Utility Curve is downward sloping. State True or False.
SOLUTION
Solution : A
Marginal utility Curve is always downward sloping.
Question 10
Suppose your friend is indifferent to the bundles (4,6) and (6,6). Are the preferences of your friend monotonic?
SOLUTION
Solution : B
If a consumer has monotonic preferences, he would prefer the bundle (6,6) to the bundle (4,6), because the bundle (6,6) has more of Good-1 as compared to the bundle (4,6)