Top 350+ Solved Micro Economics 1 MCQ Questions Answer
Q. Hicks Allen indifference theory is based on
a. weak ordering
b. strong ordering
c. constant ordering
d. multiple ordering
Q. Income consumption curve of an inferior commodity is
a. positively sloped
b. backward bending
c. downward slopping straight line
d. showing constant income effect
Q. In case of a convex indifference curve
a. mrs xy is constant
b. mrs xy is increasing
c. mrs xy is negligible
d. mrs xy is diminishing
Q. ‘Higher the indifference curve higher will be level of satisfaction’. Thestatement is
a. always true
b. always false
c. sometimes true and sometimes false
d. true only if price effect is positive
Q. As per indifference curve analysis, consumer always try to reach
a. higher indifference
b. lower indifference curve
c. middle indifference curve
d. lower income price line
Q. Which method is used by Hicks to eliminate the income effect when price of aproduct is changed
a. compensating variation in income
b. the cost difference
c. the over compensation effect
d. substituting variation in price
Q. The basic doctrine of consumers’ surplus is based on
a. indifference curve analysis
b. revealed preference theory
c. law of substitution
d. law of diminishing marginal utility
Q. According to Marshall, The law of diminishing marginal utility
a. applies on money in the manner in which it applies on commodity
b. do not applies on money except bank money
c. does not applies on bank money but applies on cash
d. applies on all commodities except money
Q. An indifference curve represent
a. four commodities
b. less than two commodities
c. only two commodities
d. only one commodity
Q. Indifference curve is always
a. concave to the origin
b. convex to the origin
c. l shaped
d. a straight line
Q. Engel curve for giffen good is
a. positively sloped
b. negatively sloped
c. horizontal straight line
d. vertical straight line
Q. Marginal utility is
a. always zero
b. increases at a diminishing rate
c. the utility derived from last unit
d. all the above
Q. Total utility is
a. the sum total of marginal utilities
b. entire utility derived from whole consumption
c. increases at a diminishing rate
d. all the above
Q. When Total utility is increasing at an decreasing rate, marginal utility is
a. constant
b. negative
c. increasing
d. decreasing
Q. Other things being equal a decrease in demand can be caused by
a. a fall in price of the commodity
b. a fall in income of the consumer
c. a rise in price of the substitute
d. none of these