Top 350+ Solved Micro Economics 1 MCQ Questions Answer
Q. Total utility is maximum when
a. marginal utility is zero
b. marginal utility is maximum
c. marginal utility increases
d. average utility is maximum
Q. Which of the following is called gossans first law
a. law of substitution
b. law of equi marginal utility
c. law of diminishing marginal utility
d. none of the above
Q. When individuals income falls (everything remain the same) his demand foran inferior good
a. rises
b. falls
c. remains the same
d. we cannot say without additional information
Q. If negative income effect is greater than positive substitution effect : theproduct will be
a. a normal good
b. an inferior good
c. a giffen good
d. a complementary good
Q. Which of the following statement is FALSE with regard to marginal utility
a. marginal utility is the utility derived from last unit
b. as consumption increases marginal utility goes on diminishing
c. at saturation point marginal utility is zero
d. marginal utility increases at a diminishing range
Q. According to Marshall consumer surplus is:
a. total utility – marginal utility
b. total utility + marginal utility
c. total utility derived – price
d. price – marginal utility
Q. If both the products X & Y are normal goods
a. slopes down towards right
b. slopes up towards right
c. slopes up towards left
d. slopes down towards left
Q. Which of the following statement is TRUE with regard to total utility
a. total utility is the utility derived from last unit
b. total utility increases at a diminishing range
c. as consumption increases total utility goes on diminishing
d. at saturation point total utility is negative
Q. If negative income effect is less than positive substitution effect : the productwill be
a. a normal good
b. an inferior good
c. a giffen good
d. a complementary good
Q. Which of the following statements is true
a. hicksian substitution effect is greater than slutsky substitution effect
b. slutsky substitution effect is greater than hicksian substitution effect
c. hicksian substitution effect is same and equal to slutsky substitution effect
d. hicksian substitution effect is the reverse of slutsky substitution effect
Q. According to Hicks substitution effect is
a. the movement to a higher indifference curve
b. the movement to a lower indifference curve
c. the movement along an indifference curve
d. the movement to a decreased consumption
Q. Strong ordering means
a. absence of indifference
b. presence of indifference
c. no difference between different combinations
d. none of the above
Q. In the fundamental theorem of consumption and to prove the law of demand,Samualson uses
a. compensating variation in income
b. the cost difference
c. the over compensation effect
d. substituting variation in price
Q. If negative income effect is greater than positive substitution effect : priceeffect will be
a. zero
b. negative
c. positive
d. positive and greater than one
Q. As per indifference curve analysis consumer equilibrium is attained when
a. slope of indifference curve is constant
b. slopes of both indifference curve and income price line are equal
c. slopes of both indifference curve and income price line are opposite
d. both income price line and indifference curve are parallel.