Which of the following inequality represents the consumer's budget constraint ? Option 1: p_1x_1 + p_2x_2 = M Option 2: p_1x_1 + p_2x_2 M

Answer: p_1x_1 + p_2x_2 ≤ M. Solution: The budget constraint states that total expenditure on goods cannot exceed the consumer's income. This means p_1x_1 + p_2x_2 ≤ M. The consumer can spend exactly equal to or less than income M. Option 1 is the budget line (equality only), not the budget constraint (which allows spending less). The inequality representation is ≤.

Micro

Consumer Behaviour

Easy

Which of the following inequality represents the consumer's budget constraint ?

$p_1x_1 + p_2x_2 = M$

$p_1x_1 + p_2x_2 < M$

$p_1x_1 + p_2x_2 \leq M$

$p_1x_1 + p_2x_2 > M$

✅ Correct Option: 3

The budget constraint states that total expenditure on goods cannot exceed the consumer's income. This means $p_1x_1 + p_2x_2 \leq M$ . The consumer can spend exactly equal to or less than income M. Option 1 is the budget line (equality only), not the budget constraint (which allows spending less). The inequality representation is $\leq$ .

2025: 29 May Shift 1

A consumer derives 10 utilities of satisfaction from consuming 1st unit of good X and 6 utilities of satisfaction from the next unit. What is the marginal utility of the second unit?

2026: 13 May Shift 2

Identify an analysis which assumes that the level of utility can be expressed in numbers?

2025: 22 May Shift 1

Which of the following statements are true for the Indifference Curve?

(A). A higher indifference curve gives a greater level of utility.

(B). The indifference curve slopes downwards from right to left.

(C). The indifference curve slopes downwards from left to right.

(D). Two indifference curves never intersect each other.

Choose the correct answer from the options given below:

2025: 22 May Shift 1

Match List-I with List-II

List-I	List-II
(A). The level of utility can be expressed in numbers.	(I). Total Utility
(B). The change in total utility due to consumption of one additional unit of a commodity.	(II). Ordinal Utility
(C). The total satisfaction derived from consuming the given amount of some commodity.	(III). Cardinal Utility
(D). The level of utility can be expressed in ranks.	(IV). Marginal Utility

Choose the correct answer from the options given below:

2026: 15 May Shift 1

Suppose the price elasticity of demand for a good is –0.2. How will the demand for the good be affected if there is a 10% increase in the price of the good?

2025: 30 May Shift 1

What will be the value of Marginal utility of the 4th unit

Units consumed	Total Utility derived (utils)
1	10
2	8
3	5
4	2

Which of the following inequality represents the consumer's budget constraint ?

Solution

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