Micro

Consumer Behaviour

Easy

When price of a good falls from Rs. 5 to Rs.4 per unit then, its demand increases by 40%. Calculate its price elasticity of demand.

1.5

-1

✅ Correct Option: 4

Percentage fall in price $= \frac{1}{5} \times 100 = 20\%$ . Price elasticity of demand $= \frac{\% \Delta Q}{\% \Delta P} = \frac{40}{20} = 2$ .

2026: 13 May Shift 1

The demand for an inferior good ___________ as the income of the consumer increases.

2025: 31 May Shift 1

Two indifference curves can never intersect each other as ...............

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 2

What are the features of an Indifference Curve?

(A) Indifference curve slopes upwards from left to right.

(B) Higher indifference curve gives greater level of utility.

(D) Two indifference curves never intersect each other

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:

2023: 20 June Shift 1

The demand for a good moves in opposite direction if change in the price of its __________ :

Solution