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CUET Economics 2023 PYQs28 May Shift 2. Free, no login required.

Micro

past year questions, CUET Economics 2023 28 May Shift 2

Consumer Behaviour

past year questions, Micro, CUET Economics 2023 28 May Shift 2

Easy

A consumer is a rational individual who knows, what is good and bad for him/her. So he always tries to achieve the best to get maximum satisfaction. Thus, the consumer chooses the set of bundles as per his preference which is best for him. The consumer always prefers to move to a point on the highest possible indifference curve given on the budget set. The slope of the budget line is the rate at which the consumer is able to substitute one good for the other in the market.

If the budget line is tangent to an indifference curve at a point, absolute value of the MRS and the Budget line are __________ at that point.

Solution

✅ Correct Option: 4

At the consumer's equilibrium, the budget line is tangent to the highest attainable indifference curve. At this tangency point, the slope of the indifference curve (absolute value of MRS) equals the slope of the budget line (price ratio). So MRS and slope of budget line are the Same.

More from this set:

Question 41

The indifference curve is :

Question 42

All the points on Indifference curve represent :

Question 43

A rational consumer is the one who has :

Question 44

Which is an example of substitute good ?

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CUET Economics Past Year Questions (Topic-Wise)