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Class 11th Important Questions Class 11 Economics Part B Unit 2- Consumer’s Equilibrium and Demand

 Question 1

Which of the following statements regarding utility is not true?

(a) It is the want satisfying power of the commodity

(b) Utility is measurable

(c) It helps a consumer to make choices

(d) It is purely a subjective entity

Answer:

(b) Utility is measurable

Question 2

Which of the following utility approaches is based on the theory of Alfred Marshall?

(a) Ordinal utility approach

(b) Cardinal utility approach

(c) Independent utility approach

(d) None of the above

Answer:

(b) Cardinal utility approach.

Question 3

How is total utility derived from the marginal utility?

Answer:

The total utility is the total sum of marginal utilities of different units of goods.

TUn = MU1+MU2+MU3———–MUn

Question 4

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

Answer:

Elasticity of demand is 4.

Question 5

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

Answer:

Indifference Curve

Question 6

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

(a) Ordinal Utility

(b) Total Utility

(c) Marginal Utility

(d) Average Utility

Answer:

(c) Marginal Utility

Question 7

Define Utility.

Answer:

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

Question 8

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 9

What will be the MU when TU is maximum?

Answer:

The MU will be zero when TU is maximum.

Question 10

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 11

Which direction does the indifference curve slope?

Answer:

The indifference curve slopes downward to the right.

Question 12

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 13

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 14

What is the point of satiety?

Answer:

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


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