Micro

Consumer Behaviour

Easy

If the income effect is stronger than the substitution effect, the demand for the good would be positively related to its price. Such a good is called?

Giffen Good.

Luxury Good.

Industrial Good.

Inferior Good.

✅ Correct Option: 1

For a Giffen good, the good is strongly inferior and the negative income effect of a price rise outweighs the substitution effect, so quantity demanded moves in the same direction as price. This violates the law of demand and defines a Giffen good.

2026: 12 May Shift 1

Arrange the values of the elasticity of demand of the following at different points on a downward straight line demand curve in ascending order.

(A) The point where the demand curve meets the horizontal axis.

(B) The point where the demand curve meets the vertical axis.

(D) At any point to the right of the midpoint of the demand curve.

Choose the correct answer from the options given below:

2025: 29 May Shift 1

Which of the following can shift the demand curve to the right?

(A) Increase in the income of the consumer (For normal goods).

(B) Decrease in the price of complementary goods.

(D) Increase in the price of goods.

Choose the correct answer from the options given below:

2025: 31 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Cardinal utility	(I) Ranking consumption bundles.
(B) Perfect substitute goods	(II) Level of utility can be expressed in numbers.
(C) Ordinal Utility	(III) The marginal Rate of Substitution is 1.
(D) Complimentary goods	(IV) An increase in the price of one good does not lead to an increase in demand for another good.

Choose the correct answer from the options given below:

(A) - (I), (B) - (IV), (C) - (III), (D) - (II)
(A) - (II), (B) - (III), (C) - (I), (D) - (IV)
(A) - (I), (B) - (IV), (C) - (II), (D) - (III)
(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

2025: 15 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Budget Set	(I) $-(P_1/P_2)$
(B) Slope of the budget line	(II) $M/P_1$
(C) Horizontal intercept of the budget line	(III) $P_1 X_1 + P_2 X_2 \le M$
(D) Vertical intercept of the budget line	(IV) $M/P_2$

Choose the correct answer from the options given below:

2023: 11 June Shift 3

An explanation for a downward sloping demand curve rests on the notion of :

2026: 23 May Shift 1

Which one of the following statements is most suitable to the law of diminishing marginal utility?

If the income effect is stronger than the substitution effect, the demand for the good would be positively related to its price. Such a good is called?

Solution

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