Micro

Consumer Behaviour

Easy

Suppose Prachi buys 30 bananas when its price is Rs. 10 per banana. When the price increases to Rs. 14 per banana, she reduces her demand to 24 bananas. What is the price elasticity of demand in absolute terms?

0.5

0.4

0.2

✅ Correct Option: 1

Elasticity $= \frac{\Delta Q/Q}{\Delta P/P} = \frac{(24-30)/30}{(14-10)/10} = \frac{-0.2}{0.4} = -0.5$ . In absolute terms, price elasticity of demand $= 0.5$ .

2025: 15 May Shift 1

Which of the following indicates a situation of consumer's equilibrium for a rational consumer consuming two goods?

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: 27 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Consumer's income changes, but prices remain unchanged. The equation of the budget line.	(I) p₁ x₁ + p₂ x₂ = M'
(B) Marginal Rate of Substitution (MRS)	(II) p'₁ x₁ + p₂ x₂ = M
(C) The price of a commodity changes, but income remains unchanged. The equation of the budget line.	(III) Δ Y/ΔX
(D) Total Utility	(IV) $MU₁ + MU₂ + ... + MU_{n-1} + MU_n$

Choose the correct answer from the options given below:

2025: 16 May Shift 1

Individual demand for a good does not depend upon which of the following?

2025: 3 June Shift 1

How much units of Good Y can the consumer consume if she spends her entire income on that good?

2023: 28 May Shift 2

Which is an example of substitute good ?

Suppose Prachi buys 30 bananas when its price is Rs. 10 per banana. When the price increases to Rs. 14 per banana, she reduces her demand to 24 bananas. What is the price elasticity of demand in absolute terms?

Solution

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