1
THE WISDOM GLOBAL SCHOOL
7 Th K.M Haridwar Delhi Road Jwalapur Haridwar
11 - MICRO - CH - 02
CLASS 11 - ECONOMICS
Section A c) Both the statements are correct
d) Statement 1 is incorrect and statemetn2 is correct
1) Read the text carefully and answer the questions: In the
real world a consumer purchases more than one commod- (f) If on the basis of the above table the condition
is, MPUx x > Py y the consumer, in this case, must
MU
ity. Let us assume that a consumer purchases two goods
X and Y.How does a consumer spends his fixed money .
income in purchasing two goods so as to maximize his a) Consume more of X and Y
total utility. The law of equity marginal utility tells us b) Consume more of Y
the way a consumer maximizes his total utility. c) Consume less of X
MUX (units) MUY (units) d) Consume more of X
100 160
2) Which of these is not a property of the indifference curve?
[1]
80 150
a) Indifference curve is concave to origin.
60 120 b) Indifference curve slopes downwards.
c) Two indifference curves cannot intersect each other.
50 110 d) Higher indifference curve represents higher level of
satisfaction.
[6] 3) A budget constraint line is a result of? [1]
(a) A consumer consumes only two goods X and Y as a) Market price of commodity X
shown in the table above. If the price of one of b) Income of the consumer
the goods falls, the indifference curve in this case: c) Market price of commodity Y
d) All of above
a) Shifts downwards
b) Can shift both upwards or downwards 4) Marginal utility curve of a given consumer is also his?
c) Does not shift [1]
d) Shifts upwards a) Demand curve b) Supply curve
c) Indifference curve d) Total utility curve
(b) Given PX = |5 and PY = |10, find the consumer’s
equilibrium based on the above table. 5) Which of the following statement is false?
a) At third level b) At second level i. A higher Indifference Curve represents higher level
c) At fourth level d) At first level of satisfaction.
ii. Budget Line is the locus of points that show such
(c) The law states that a consumer will so allocate his combinations of two goods that the consumer can
expenditure so that the utility gained from the last buy with his given income and at given prices.
rupee spent on each commodity is equal. Based on iii. Marginal utility is the sum total of utility derived
the above text, this law is known as . from the consumption of all units of a commodity.
a) Law of diminishing marginal utility [1]
b) Law of diminishing marginal rate of substitution a) Only ii b) I and ii only
c) Law of equilibrium c) Only i d) Only iii
d) Law of equi marginal utility 6) When price of Good - Y (shown on Y - axis) rises: [1]
(d) MUX
PX > MUY
PY a) Price line rotates to the left
For this case, the consumer is getting more marginal b) Price line shifts to the left
utility per rupee in the case of good X as compared c) Price line rotates to the right
to Y based on the table as shown above. Therefore, d) Price line shifts to the right
he will:
7) Indifference curve depicts [1]
a) Buy more of X and less of Y.
b) Buy X good only a) None of above
c) Buy Y good only b) Satisfaction
d) Buy more of Y and less of X. c) An equal quantity curve of a consumer
d) Affordability
(e) Statement 1: Marginal utility tends to decline as
consumption of the commodity increases. 8) In case of cardinal utility approach, utility is measured
Statement 2: Total utility tends to increase only at in: [1]
the diminishing rate. a) Ranks b) Price
c) Utils d) Rupees
a) Both the statements are incorrect
b) Statement 1 is correct and statement 2 is incor- 9) A shift in the budget line, when prices are constant, is
rect due to: [1]
2
a) Change in income Reason (R):Each combination offers the same level of
b) Change in utility satisfaction to the consumer. [1]
c) Change in dema
a) Both A and R are true and R is the correct expla-
d) Change in preferences
nation of A.
10) Consuming two goods, a consumer attains equilibrium b) Both A and R are true but R is not the correct
when: [1] explanation of A.
MU1 c) A is true but R is false.
a) = MU 2
P1
MU2
P2 d) A is false but R is true.
b) P2 > MUP1
1
c) MU1 MU2
> P2 19) Assertion (A): Indifference Curves are always convex to
P1
TU1 the origin.
d) > TU
Reason (R): Diminishing Marginal Rate Substitution. [1]
2
P1 P2
11) Want - satisfying power of a commodity is called: [1] a) Both A and R are true and R is the correct expla-
a) Consumption b) Value addition
nation of A.
c) Utility d) Production
b) Both A and R are true but R is not the correct
12) What will you say about MU when TU is maximum? [1] explanation of A.
a) It will be zero b) It will be negative c) A is true but R is false.
c) It will be one d) It will be infinity d) A is false but R is true.
13) A consumer will purchase more of Good - Y than Good 20) State True or False: [4]
- X, only when: [1] (a) All points on the indifference curve offer equal sat-
a) MUX
< MU Y isfaction to the consumer. [1]
PX PY
b) MUX
PX > MU
PY
Y
(b) All attainable combinations of Good - X and Good
c) NUX
= MUM - Y are below the budget line of a consumer. [1]
PX
MUY
d) PY = MUM (c) A situation when PPX
Y
> M UX
M UY is better than when
14) Which of the following statements regarding ordinal utility
PX
PY = M UX
M UY . [1]
is true? [1] (d) Total utility is maximum when marginal utility starts
declining. [1]
a) Utility cannot be measured, but can be ranked in
order of preferences. 21) Fill in the blanks: [5]
b) Utility can be measured, but cannot be ranked in (a) Consumer surplus is more in the case of . [1]
order of preferences.
c) Utility can neither be measured nor can be ranked (b) An indifference map is a graph that represents
in order of preferences. indifference curve(s). (one, more than one) [1]
d) Utility can be measured and can also be ranked in (c) Utility derived from an additional unit of a good is
order of preferences. called . [1]
15) Total utility is at the point of satiety. [1] (d) The want satisfying power of a commodity is known
a) Negative b) Zero as . [1]
c) Maximum d) Minimum (e) An indifference curve is a graphic presentation of
16) Consumer’s equilibrium means? [1] . (indifference map, indifference set) [1]
a) The position of rest or maximum satisfaction with 22) Identify the correct sequence of alternatives given in Col-
given income and prices umn II by matching them with respective items in Column
b) The point from where the consumer starts his con- I:
Column I Column II
sumption
(i) Cardinal (a) When
c) The position of frequent movement in all directions
measurement of consumption of an
d) The position which the consumer cannot attain be-
utility additional unit leads
cause his income is low
to dissatisfaction
17) Assertion (A):Equilibrium occurred only at the point where
the price line intersects the indifference curve and not the (ii) TU (b) Utility
point below the intersection. measured in terms
Reason (R):At any point below the intersection the con- of cardinal numbers
sumer is getting the same amount of good as the point
of intersection he is getting a lesser amount of another (iii) MU curve (c) MPU8 x =
M Uy
=
good. [1]
Py
M UM
a) Both A and R are true and R is the correct expla-
nation of A. (iv) Negative MU (d) Slopes
b) Both A and R are true but R is not the correct downwards from
explanation of A. left to right
c) A is true but R is false.
d) A is false but R is true. (v) Consumer (e)Σ MU
equilibrium
18) Assertion (A): Each point on the indifference curve shows
one combination of two commodities. [1]
3
23) Identify the correct sequence of alternatives given in Col- Column I Column II
umn II by matching them with respective items in Column (i) Indifference (a) ∆Y
∆X
I: curve
(ii) Consumer’s (b) Budget line
equilibrium rotates to the right
starting from the Y
- axis
(iii) Slope of IC (c) Diagrammatic
presentation of an
indifference set of
a consumer
(iv) PX falls (d) Consumer
should move
downward to the
right along the IC
(v)M RSXY > PX
PY (e) Optimum choice
of the consumer
[1]
