Theory of Consumer Behaviour MCQs with answers

Dear candidates you will find MCQ questions of 11th Class - Microeconomics: Introductory Microeconomics | Chapter: Theory of Consumer Behaviour here. Learn these questions and prepare yourself for coming examinations. You can check the right answer of any question by clicking the option or by clicking view answer button.
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Q. Who gave the cardinal concept of utility?
  • (A) Marshall
  • (B) Pigou
  • (C) Hicks
  • (D) Samuelson
💬 Discuss
✅ Correct Answer: (A) Marshall
Q. Consumer’s behaviour is studied in:
  • (A) Micro Economics
  • (B) Macro Economics
  • (C) Income Analysis
  • (D) None of these
💬 Discuss
✅ Correct Answer: (A) Micro Economics
Q. 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
💬 Discuss
✅ Correct Answer: (D) All of these
Q. 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
💬 Discuss
✅ Correct Answer: (B) Law of Diminishing Marginal Utility
Q. 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
💬 Discuss
✅ Correct Answer: (D) All of these
Q. How we calculate marginal utility ?
  • (A) ∆TU/∆Q
  • (B) ∆MU/∆Q
  • (C) ∆Q/∆TU
  • (D) ∆Q/∆MU
💬 Discuss
✅ Correct Answer: (A) ∆TU/∆Q
Q. When TU becomes maximum, MU is
  • (A) Positive
  • (B) Negative
  • (C) Zero
  • (D) None of these
💬 Discuss
✅ Correct Answer: (C) Zero
Q. 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
💬 Discuss
✅ Correct Answer: (D) All of these
Q. Who basically propounded the concept of Law of Equimarginal Utility ?
  • (A) Marshall
  • (B) Gossen
  • (C) Ricardo
  • (D) J. S. Mill
💬 Discuss
✅ Correct Answer: (C) Ricardo
Q. 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
💬 Discuss
✅ Correct Answer: (A) Convex to the origin
Q. The ability of satisfying human want in a goods is called its:
  • (A) Productivity
  • (B) Satisfaction
  • (C) Utility
  • (D) Profitability
💬 Discuss
✅ Correct Answer: (C) Utility
Q. Slope of budget line or price line is
  • (A) –\(\frac{P_x}{P_y}\)
  • (B) –\(\frac{P_y}{P_x}\)
  • (C) +\(\frac{P_x}{P_y}\)
  • (D) +\(\frac{P_y}{P_x}\)
💬 Discuss
✅ Correct Answer: (A) –\(\frac{P_x}{P_y}\)
Q. Utility is related to
  • (A) Usefulness
  • (B) Morality
  • (C) Satisfaction of human wants
  • (D) All the above
💬 Discuss
✅ Correct Answer: (D) All the above
Q. Utility can be measured by
  • (A) Money
  • (B) Exchange of goods
  • (C) Weight of the good
  • (D) None of these
💬 Discuss
✅ Correct Answer: (A) Money
Q. 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
💬 Discuss
✅ Correct Answer: (C) Law of substitution
Q. Indifference curve slopes
  • (A) From right to left
  • (B) From left to right
  • (C) Both (a) and (b)
  • (D) None of these
💬 Discuss
✅ Correct Answer: (B) From left to right
Q. 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
💬 Discuss
✅ Correct Answer: (B) Total Utility
Q. Who propounded the ordinal utility theory’ ?
  • (A) Marshall
  • (B) Pigou
  • (C) Hicks and Allen
  • (D) Ricardo
💬 Discuss
✅ Correct Answer: (C) Hicks and Allen
Q. The propounder of law of diminishing marginal utility is
  • (A) Gossen
  • (B) Adam smith
  • (C) Chapman
  • (D) Hicks
💬 Discuss
✅ Correct Answer: (A) Gossen
Q. Consumer’s equilibrium takes at a point where
  • (A) MU = Price
  • (B) MU < Price
  • (C) MU > Price
  • (D) None of these
💬 Discuss
✅ Correct Answer: (A) MU = Price
Q. According to total outlay method, the demand of a good is sinelastic 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.
💬 Discuss
✅ Correct Answer: (B) When price of good decreases and money spent decreases
Q. 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.
💬 Discuss
✅ Correct Answer: (B) Complementary goods
Q. 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
💬 Discuss
✅ Correct Answer: (D) All of the above
Q. Indifference curves were first introduced by the English economist in 1881 by
  • (A) Edge worth
  • (B) Pareto
  • (C) Myers
  • (D) Hicks
💬 Discuss
✅ Correct Answer: (A) Edge worth
Q. How many tremendous curves can touch the budget line
  • (A) One
  • (B) Two
  • (C) Several
  • (D) Depends on the basis of indifference maps
💬 Discuss
✅ Correct Answer: (A) One
Q. 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
💬 Discuss
✅ Correct Answer: (A) Related to goods
Q. Consumer is in equilibrium when
  • (A) MUx = PUx
  • (B) MUx > PUx
  • (C) MUx < Px
  • (D) MUx ÷ Px
💬 Discuss
✅ Correct Answer: (A) MUx = PUx
Q. 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
💬 Discuss
✅ Correct Answer: (A) Price of the good
Q. For luxury goods the demand is
  • (A) Inelastic
  • (B) Elastic
  • (C) Highly elastic
  • (D) Perfectly Inelastic
💬 Discuss
✅ Correct Answer: (C) Highly elastic
Q. 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
💬 Discuss
✅ Correct Answer: (B) -1.5
Q. 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
💬 Discuss
✅ Correct Answer: (B) will be unity
Q. 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
💬 Discuss
✅ Correct Answer: (A) Change in demand due to change in price
Q. Elasticity of demand for necessities is
  • (A) Zero
  • (B) Unlimited
  • (C) Greater than unity
  • (D) Less than unity
💬 Discuss
✅ Correct Answer: (A) Zero
Q. How many types elasticity of uemand has ?
  • (A) Three
  • (B) Five
  • (C) Six
  • (D) Seven
💬 Discuss
✅ Correct Answer: (B) Five
Q. Which of the following factor affects elasticity of demand ?
  • (A) Nature of Goods
  • (B) Price Level
  • (C) Income Level
  • (D) All of these
💬 Discuss
✅ Correct Answer: (D) All of these
Q. Who propounded the percentage or proportionate method of measuring elasticity of demand ?
  • (A) Marshall
  • (B) Flux
  • (C) Hicks
  • (D) None of these
💬 Discuss
✅ Correct Answer: (B) Flux
Q. With which method, elasticity of demand is measured ?
  • (A) Total Expenditure Method
  • (B) Percentage or Proportionate Method
  • (C) Point Method
  • (D) All of these
💬 Discuss
✅ Correct Answer: (D) All of these
Q. Which of the following shows elasticity less than one ?
  • (A) Necessity Goods
  • (B) Comforts
  • (C) Luxuries
  • (D) All of these
💬 Discuss
✅ Correct Answer: (A) Necessity Goods
Q. For Giffin goods, price elasticity of demand is
  • (A) Negative
  • (B) Positive
  • (C) Zero
  • (D) None of these
💬 Discuss
✅ Correct Answer: (B) Positive
Q. Elasticity of demand is a
  • (A) Qualitative Statement
  • (B) Quantitative Statement
  • (C) Both (a) and (b)
  • (D) None of the above
💬 Discuss
✅ Correct Answer: (B) Quantitative Statement
Q. With an increase in income consumer decreases the consumption of which goods ?
  • (A) Inferior goods
  • (B) Normal goods
  • (C) Giffin goods
  • (D) Both (a) and (b)
💬 Discuss
✅ Correct Answer: (C) Giffin goods
Q. Hie slope of the demand Curve of a normal goods is
  • (A) Negative
  • (B) Positive
  • (C) Zero
  • (D) Undefined
💬 Discuss
✅ Correct Answer: (A) Negative
Q. With a rise in price the demand for ‘Giffin’ goods
  • (A) increases
  • (B) decreases
  • (C) remains constant
  • (D) becomes unstable
💬 Discuss
✅ Correct Answer: (A) increases
Q. For a change in which of the following, there is no change in demand ?
  • (A) Change in price
  • (B) Change in income
  • (C) Change in taste and fashion
  • (D) None of these
💬 Discuss
✅ Correct Answer: (D) None of these
Q. 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 of these
💬 Discuss
✅ Correct Answer: (D) All of these
Q. 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
💬 Discuss
✅ Correct Answer: (A) Price rises and demand falls
Q. With rise in coffee price, the demand of tea:
  • (A) Rises
  • (B) Falls
  • (C) Remains stable
  • (D) None of these
💬 Discuss
✅ Correct Answer: (A) Rises
Q. 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
💬 Discuss
✅ Correct Answer: (D) All the above
Q. 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
💬 Discuss
✅ Correct Answer: (C) Indirect
Q. 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
💬 Discuss
✅ Correct Answer: (D) All of these
Q. Which of the following is a demand function ?
  • (A) PX
  • (B) DX = PX
  • (C) Dx = (Px)
  • (D) None of these
💬 Discuss
✅ Correct Answer: (C) Dx = (Px)
Q. Law of Demand is a:
  • (A) Qualitative Statement
  • (B) Quantitative Statement
  • (C) Both (a) and (b)
  • (D) None of these
💬 Discuss
✅ Correct Answer: (A) Qualitative Statement
Q. Goods, which can alternatively be used, are called:
  • (A) Complementary Goods
  • (B) Substitutes
  • (C) Comforts
  • (D) None of these
💬 Discuss
✅ Correct Answer: (B) Substitutes
Q. Which of the following factor affects demand ?
  • (A) Price
  • (B) Change in income
  • (C) Taste of the Consumer
  • (D) All of these
💬 Discuss
✅ Correct Answer: (D) All of these
Q. 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
💬 Discuss
✅ Correct Answer: (A) Necessities Goods
Q. 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
💬 Discuss
✅ Correct Answer: (B) Downward from left to right
Q. Which element is essential for demand ?
  • (A) Desire to consume
  • (B) Availability of adequate resources
  • (C) Willingness to consume
  • (D) All of these
💬 Discuss
✅ Correct Answer: (D) All of these
Q. 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
  • (D) Both (a) and (b)
💬 Discuss
✅ Correct Answer: (D) Both (a) and (b)
Q. 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
💬 Discuss
✅ Correct Answer: (C) Both (a) and (b)
Q. When marginal utility is negative, then total utility
  • (A) is maximum
  • (B) Starts decreasing
  • (C) increases at decreasing rate
  • (D) None of these
💬 Discuss
✅ Correct Answer: (B) Starts decreasing
Q. 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
💬 Discuss
✅ Correct Answer: (A) Marginal utility of a good should be equal to its price.
Q. The capability of a commodity to satisfy human wants is
  • (A) Consumption
  • (B) Utility
  • (C) Quality
  • (D) Taste
💬 Discuss
✅ Correct Answer: (B) Utility

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Table of contents

  1. Who gave the cardinal concept of utility?
  2. Consumer’s behaviour is studied in:
  3. Which of the following statement is true ?
  4. Which is the First Law of Gossen?
  5. Which of the following is a characteristic of utility ?
  6. How we calculate marginal utility ?
  7. When TU becomes maximum, MU is
  8. Which of the following is true ?
  9. Who basically propounded the concept of Law of Equimarginal Utility ?
  10. In difference curve is:
  11. The ability of satisfying human want in a goods is called its:
  12. Slope of budget line or price line is
  13. Utility is related to
  14. Utility can be measured by
  15. Law of Equi-marginal utility is called:
  16. Indifference curve slopes
  17. The addition of utilities obtained from all units of a goods is called
  18. Who propounded the ordinal utility theory’ ?
  19. The propounder of law of diminishing marginal utility is
  20. Consumer’s equilibrium takes at a point where
  21. According to total outlay method, the demand of a good is sinelastic when
  22. If price of goods ‘X’ falls leading to increase in demand of goods ‘ Y’ then both the goods
  23. Any statement about the demand of an object is considered complete when it is mentioned in the follo
  24. Indifference curves were first introduced by the English economist in 1881 by
  25. How many tremendous curves can touch the budget line
  26. Marshall has given the law of Equimarginal utility related
  27. Consumer is in equilibrium when
  28. Any statement about demand for a good is considered complete only when the following is/are mentione
  29. For luxury goods the demand is
  30. If the demand for a good changes by 60% due to 40% change in price, the elasticity of demand is
  31. The elasticity of demand at the mid-point of a straight line demand curve:
  32. Price elasticity of demand means
  33. Elasticity of demand for necessities is
  34. How many types elasticity of uemand has ?
  35. Which of the following factor affects elasticity of demand ?
  36. Who propounded the percentage or proportionate method of measuring elasticity of demand ?
  37. With which method, elasticity of demand is measured ?
  38. Which of the following shows elasticity less than one ?
  39. For Giffin goods, price elasticity of demand is
  40. Elasticity of demand is a
  41. With an increase in income consumer decreases the consumption of which goods ?
  42. Hie slope of the demand Curve of a normal goods is
  43. With a rise in price the demand for ‘Giffin’ goods
  44. For a change in which of the following, there is no change in demand ?
  45. Which is a reason of change in demand ?
  46. Contraction in demand appears when
  47. With rise in coffee price, the demand of tea:
  48. Which of the following is a reason for fall in demand ?
  49. For normal goods, Law of Demand states the relationship between price and quantity of goods:
  50. When change in the price of goods-X affects the demand of goods-Y, this demand is called
  51. Which of the following is a demand function ?
  52. Law of Demand is a:
  53. Goods, which can alternatively be used, are called:
  54. Which of the following factor affects demand ?
  55. In which goods, price fall does not make any increase in demand ?
  56. Demand Curve generally slopes
  57. Which element is essential for demand ?
  58. According to Marshall, utility of a commodity:
  59. According to the law of equi-marginal utility, the condition for consumer’s equilibrium is
  60. When marginal utility is negative, then total utility
  61. For the maximum satisfaction of consumer:
  62. The capability of a commodity to satisfy human wants is