Micro

Consumer Behaviour

Medium

Increase in the income of buyers (in case of inferior goods) will cause _________

Fall in equilibrium price and quantity.

Rise in equilibrium price and quantity.

Fall in equilibrium price and quantity to rise.

Rise in equilibrium price and quantity to fall.

✅ Correct Option: 1

Option 1: Fall in equilibrium price and quantity -> Inferior goods have an inverse relationship with income. When buyers' income increases, they switch to superior alternatives, causing demand for inferior goods to decrease. A leftward shift in the demand curve leads to both lower equilibrium price and lower equilibrium quantity. Examples include low-quality goods that people stop buying as they become wealthier. -> correct

2026: 31 May Shift 1

Which of the following combinations are correct about the total expenditure method of measuring elasticity?

A. Total expenditure on a commodity increases with the increase in the price of the commodity then elasticity of demand for that commodity is elastic.

B. Total expenditure on a commodity increases with the increase in the price of the commodity then elasticity of demand for that commodity is inelastic.

C. Demand for that commodity is less responsive to the changes in price of that commodity then total expenditure increases with increase in price.

D. Demand for that commodity is more responsive to the changes in price of that commodity then total expenditure decreases with increase in price.

Choose the correct answer from the options given below:

2025: 21 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Increase in consumers' income	(I) Budget line becomes flatter
(B) Decrease in price of good on X axis	(II) No change in the slope of budget line
(C) Equal increase in price of both good X and good Y	(III) Parallel and rightward shift in their budget line
(D) Decrease in Price of the good on Y axis	(IV) Budget line becomes steeper

Choose the correct answer from the options given below:

2025: 16 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Increase in price of goods X	(I) Increase in demand for normal goods.
(B) Increase in income of consumers	(II) Demand is price inelastic
(C) Good X is a necessary good	(III) Unit elasticity of demand.
(D) Demand curve of Good X is a rectangular hyperbola	(IV) Contraction in demand for good X

Choose the correct answer from the options given below:

2026: 21 May Shift 2

The expenditure on the good would change in the opposite direction as the price change if and only if the percentage change in quantity is greater than the percentage change in price, then the elasticity of good is:

2025: 28 May Shift 1

What would be the value of the Marginal Rate of Substitution (MRS) when Good-X increases by 5 with the decrease of Good-Y by 15?

2025: 30 May Shift 1

When utility is measured in quantitative terms, it is ______ of consumer equilibrium.

Increase in the income of buyers (in case of inferior goods) will cause _________

Solution

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