CUET Economics - Micro - Consumer Behaviour | Free Questions - Page 2

Q1:

2025: 3 June Shift 2

Micro

>

Consumer Behaviour

Medium

Arrange the following statements showing the change in budget set due to change in income.

(A) The equation of the budget line is $P_1 X_1 + P_2 X_2 = M'$ .

(B) Consumer's income increases from $M$ to $M'$ , but the price of goods remains constant.

(C) The set of available bundles depends upon prices and the income of the consumer.

(D) Consumers can buy more of the goods at the prevailing market prices.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(B), (A), (C), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 4

Correct Answer

Explanation

Q2:

2025: 3 June Shift 1

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 Answer

Option 1

Correct Answer

Explanation

Q3:

2025: 3 June Shift 1

Micro

>

Consumer Behaviour

Easy

Read the report carefully and answer the questions based on the report:

Consumer’s Budget	₹ 100
Price of Good X	₹ 5 per unit
Price of Good Y	₹ 10 per unit

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

5 units

10 units

15 units

20 units

Correct Answer

Option 4

Correct Answer

Explanation

Q4:

2025: 3 June Shift 1

Micro

>

Consumer Behaviour

Easy

Read the report carefully and answer the questions based on the report:

Consumer’s Budget	₹ 100
Price of Good X	₹ 5 per unit
Price of Good Y	₹ 10 per unit

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

5 units

10 units

15 units

20 units

Correct Answer

Option 2

Correct Answer

Explanation

Q5:

2025: 3 June Shift 1

Micro

>

Consumer Behaviour

Easy

Read the report carefully and answer the questions based on the report:

Consumer’s Budget	₹ 100
Price of Good X	₹ 5 per unit
Price of Good Y	₹ 10 per unit

In a situation when MRSxy > Px / Py, the consumer would react by:

Decreasing the consumption of Good X.

Increasing the consumption of Good Y.

Increasing the consumption of Good X.

Decreasing the consumption of Good Y.

Correct Answer

Option 3

Correct Answer

Explanation

Q6:

2025: 3 June Shift 1

Micro

>

Consumer Behaviour

Easy

Read the report carefully and answer the questions based on the report:

Consumer’s Budget	₹ 100
Price of Good X	₹ 5 per unit
Price of Good Y	₹ 10 per unit

On the basis of given data, the slope of the price line will be _________

0.5

2

5

10

Correct Answer

Option 1

Correct Answer

Explanation

Q7:

2025: 3 June Shift 1

Micro

>

Consumer Behaviour

Easy

Read the report carefully and answer the questions based on the report:

Consumer’s Budget	₹ 100
Price of Good X	₹ 5 per unit
Price of Good Y	₹ 10 per unit

On the basis of given data above, the correct equation of price line will be.

5X + 12Y = 100

10X + 5Y = 100

5Qx + 10Qy = 100

10Qx + 5Qy = 100

Correct Answer

Option 3

Correct Answer

Explanation

Q8:

2025: 2 June Shift 1

Micro

>

Consumer Behaviour

Medium

Law of demand is violated when?

Income effect is negative.

Substitution effect is negative.

Negative income effect is greater than substitution effect.

Negative income effect is less than substitution effect.

Correct Answer

Option 3

Correct Answer

Explanation

Q9:

2025: 2 June Shift 1

Micro

>

Consumer Behaviour

Easy

The Law of Diminishing Marginal Utility states that when more and more units of a commodity are consumed, Marginal Utility __________

begins to increase.

remains constant.

begins to decrease.

becomes zero.

Correct Answer

Option 3

Correct Answer

Explanation

Q10:

2025: 2 June Shift 1

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Consumer's equilibrium	(I) ΔY/ ΔX
(B) Slope of IC	(II) Budget line rotates to the right starting from the Y axis
(C) Px falls	(III) Consumer should move downwards to the right along the IC
(D) MRSxy > Px/Py	(IV) Optimum choice of the consumer

Choose the correct answer from the options given below:

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

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

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

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

Correct Answer

Option 1

Correct Answer

Explanation

Q11:

2025: 2 June Shift 1

Micro

>

Consumer Behaviour

Easy

A shift in the budget line, when prices are constant, is due to.

Change in demand of the commodity.

Change in the income of the consumer.

Change in preferences of the consumer.

Change in utility derived.

Correct Answer

Option 2

Correct Answer

Explanation

Q12:

2025: 31 May Shift 1

Micro

>

Consumer Behaviour

Easy

How will an increase in the consumer's income affect the budget line?

Parallel inward shift of budget line.
Parallel outwards shift in budget line.
The budget line rotates outwards.
Budget line rotates and shifts outwards.

Parallel inward shift of budget line.

Parallel outwards shift in budget line.

The budget line rotates outwards.

Budget line rotates and shifts outwards.

Correct Answer

Option 2

Correct Answer

Explanation

Q13:

2025: 31 May Shift 1

Micro

>

Consumer Behaviour

Medium

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)

(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)

Correct Answer

Option 2

Correct Answer

Explanation

Q14:

2025: 31 May Shift 1

Micro

>

Consumer Behaviour

Medium

The equation of the demand curve : pq = e, where e is a constant.

Select the INCORRECT statement:

The demand curve is a rectangular hyperbola.
The value of p times q is constant.
The elasticity of demand at all points located on this demand curve is greater than 1.
At every point of consumption, the expenditure remains the same.

The demand curve is a rectangular hyperbola.

The value of p times q is constant.

The elasticity of demand at all points located on this demand curve is greater than 1.

At every point of consumption, the expenditure remains the same.

Correct Answer

Option 3

Correct Answer

Explanation

Q15:

2025: 31 May Shift 1

Micro

>

Consumer Behaviour

Medium

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

They give the same level of satisfaction.
They give different levels of satisfaction.
They are concave to the origin.
They are convex to the origin.

They give the same level of satisfaction.

They give different levels of satisfaction.

They are concave to the origin.

They are convex to the origin.

Correct Answer

Option 2

Correct Answer

Explanation

Q16:

2025: 30 May Shift 2

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Substitution effect stronger than the income effect	(I) Inferior goods
(B) Income effect stronger than the substitution effect	(II) Complementary goods
(C) Demands and income move opposite direction	(III) Normal goods
(D) Goods consumed together	(IV) Giffen goods

Choose the correct answer from the options given below:

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

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

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

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

Correct Answer

Option 2

Correct Answer

Explanation

Q17:

2025: 30 May Shift 2

Micro

>

Consumer Behaviour

Medium

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.

(C) 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:

(A), (C) and (D) only

(A), (B) and (D) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 4

Correct Answer

Explanation

Q18:

2025: 30 May Shift 1

Micro

>

Consumer Behaviour

Easy

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

Ordinal Approach.

Cardinal Approach.

Indifference Curve approach.

Law of Diminishing marginal utility.

Correct Answer

Option 2

Correct Answer

Explanation

Q19:

2025: 30 May Shift 1

Micro

>

Consumer Behaviour

Easy

The rate at which consumer is willing to substitute one good for another is represented by ________.

Marginal rate of transformation.

Slope of indifference curve.

Price Ratio.

optimum choice of the consumer.

Correct Answer

Option 2

Correct Answer

Explanation

Q20:

2025: 30 May Shift 1

Micro

>

Consumer Behaviour

Easy

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

8 utils

3 utils

3 utils

25 utils

Correct Answer

Option 2

Correct Answer

Explanation

Q21:

2025: 29 May Shift 2

Micro

>

Consumer Behaviour

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Equality of the Marginal Rate of Substitution and the Ratio of the Prices

The optimum bundle of the consumer is located at the point where the budget line is tangent to one of the indifference curves. If the budget line is tangent to an indifference curve at a point, the absolute value of the slope of the indifference curve and that of the budget line are the same at that point. The slope of the indifference curve is the rate at which the consumer is willing to substitute one good for the other. The slope of the budget line is the rate at which the consumer is able to substitute one good for the other in the market. At the optimum, the two rates should be the same. To see why, consider a point where this is not so. Suppose the marginal rate of substitution at such a point is 2 and suppose the two goods have the same price. At this point, the consumer is willing to give up 2 mangoes if she is given an extra banana. But in the market, she can buy an extra banana if she gives up just 1 mango. Therefore, if she buys an extra banana, she can have more of both the goods compared to the bundle represented by the point, and hence, move to a preferred bundle. Thus, a point at which the MRS is greater, the price ratio cannot be the optimum. A similar argument holds for any point at which the MRS is less than the price ratio.

The economic concept at which the consumer is willing to substitute one good for the other?

Price Ratio.

Marginal rate of substitution.

Marginal rate of technical substitution.

Diminishing marginal rate.

Correct Answer

Option 2

Correct Answer

Explanation

Q22:

2025: 29 May Shift 2

Micro

>

Consumer Behaviour

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Equality of the Marginal Rate of Substitution and the Ratio of the Prices

The optimum bundle of the consumer is located at the point where the budget line is tangent to one of the indifference curves. If the budget line is tangent to an indifference curve at a point, the absolute value of the slope of the indifference curve and that of the budget line are the same at that point. The slope of the indifference curve is the rate at which the consumer is willing to substitute one good for the other. The slope of the budget line is the rate at which the consumer is able to substitute one good for the other in the market. At the optimum, the two rates should be the same. To see why, consider a point where this is not so. Suppose the marginal rate of substitution at such a point is 2 and suppose the two goods have the same price. At this point, the consumer is willing to give up 2 mangoes if she is given an extra banana. But in the market, she can buy an extra banana if she gives up just 1 mango. Therefore, if she buys an extra banana, she can have more of both the goods compared to the bundle represented by the point, and hence, move to a preferred bundle. Thus, a point at which the MRS is greater, the price ratio cannot be the optimum. A similar argument holds for any point at which the MRS is less than the price ratio.

The rate at which the consumer is able to substitute one good for the other in the market is called?

Price Ratio.

Marginal rate of substitution.

Marginal rate of technical substitution.

Diminishing marginal rate.

Correct Answer

Option 1

Correct Answer

Explanation

Q23:

2025: 29 May Shift 2

Micro

>

Consumer Behaviour

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Equality of the Marginal Rate of Substitution and the Ratio of the Prices

The optimum bundle of the consumer is located at the point where the budget line is tangent to one of the indifference curves. If the budget line is tangent to an indifference curve at a point, the absolute value of the slope of the indifference curve and that of the budget line are the same at that point. The slope of the indifference curve is the rate at which the consumer is willing to substitute one good for the other. The slope of the budget line is the rate at which the consumer is able to substitute one good for the other in the market. At the optimum, the two rates should be the same. To see why, consider a point where this is not so. Suppose the marginal rate of substitution at such a point is 2 and suppose the two goods have the same price. At this point, the consumer is willing to give up 2 mangoes if she is given an extra banana. But in the market, she can buy an extra banana if she gives up just 1 mango. Therefore, if she buys an extra banana, she can have more of both the goods compared to the bundle represented by the point, and hence, move to a preferred bundle. Thus, a point at which the MRS is greater, the price ratio cannot be the optimum. A similar argument holds for any point at which the MRS is less than the price ratio.

The exceptional case in optimal choice of the consumer is where ..................

One good is more preferred than another.

Entire income is spent on one of the goods only.

Partial spending of income on both goods.

Both goods are preferred in same quantity.

Correct Answer

Option 2

Correct Answer

Explanation

Q24:

2025: 29 May Shift 2

Micro

>

Consumer Behaviour

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Equality of the Marginal Rate of Substitution and the Ratio of the Prices

The optimum bundle of the consumer is located at the point where the budget line is tangent to one of the indifference curves. If the budget line is tangent to an indifference curve at a point, the absolute value of the slope of the indifference curve and that of the budget line are the same at that point. The slope of the indifference curve is the rate at which the consumer is willing to substitute one good for the other. The slope of the budget line is the rate at which the consumer is able to substitute one good for the other in the market. At the optimum, the two rates should be the same. To see why, consider a point where this is not so. Suppose the marginal rate of substitution at such a point is 2 and suppose the two goods have the same price. At this point, the consumer is willing to give up 2 mangoes if she is given an extra banana. But in the market, she can buy an extra banana if she gives up just 1 mango. Therefore, if she buys an extra banana, she can have more of both the goods compared to the bundle represented by the point, and hence, move to a preferred bundle. Thus, a point at which the MRS is greater, the price ratio cannot be the optimum. A similar argument holds for any point at which the MRS is less than the price ratio.

The optimum bundle of the consumer is located at the point where..................?

Budget line is tangent to the indifference curves.

Budget line is tangent to one of the indifference curves.

Budget line is equal indifference curves.

Marginal rate of transformation is tangent to the price ratio.

Correct Answer

Option 2

Correct Answer

Explanation

Q25:

2025: 29 May Shift 2

Micro

>

Consumer Behaviour

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

Equality of the Marginal Rate of Substitution and the Ratio of the Prices

The optimum bundle of the consumer is located at the point where the budget line is tangent to one of the indifference curves. If the budget line is tangent to an indifference curve at a point, the absolute value of the slope of the indifference curve and that of the budget line are the same at that point. The slope of the indifference curve is the rate at which the consumer is willing to substitute one good for the other. The slope of the budget line is the rate at which the consumer is able to substitute one good for the other in the market. At the optimum, the two rates should be the same. To see why, consider a point where this is not so. Suppose the marginal rate of substitution at such a point is 2 and suppose the two goods have the same price. At this point, the consumer is willing to give up 2 mangoes if she is given an extra banana. But in the market, she can buy an extra banana if she gives up just 1 mango. Therefore, if she buys an extra banana, she can have more of both the goods compared to the bundle represented by the point, and hence, move to a preferred bundle. Thus, a point at which the MRS is greater, the price ratio cannot be the optimum. A similar argument holds for any point at which the MRS is less than the price ratio.

A consumer is willing to give up 4 bananas if it is given an extra mango, but in the market, if it gives up 6 bananas, this bundle will be considered.

Preferred bundle.

Optimum bundle.

Most preferred bundle.

Inferior bundle.

Correct Answer

Option 4

Correct Answer

Explanation

Q26:

2025: 29 May Shift 1

Micro

>

Consumer Behaviour

Medium

Arrange the following stages of Consumer's Equilibrium in the correct sequence under the utility analysis

(A) Marginal Utility becomes equal to the price of a commodity

(B) Marginal utility, derived from a commodity X is greater than Px

(C) Increase the consumption of commodity X

(D) The consumer reallocates expenditure to maximize satisfaction.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(B), (D), (C), (A)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation

Q27:

2025: 29 May Shift 1

Micro

>

Consumer Behaviour

Easy

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?

10 utils.

14 utils.

6 utils.

16 utils.

Correct Answer

Option 3

Correct Answer

Explanation

Q28:

2025: 29 May Shift 1

Micro

>

Consumer Behaviour

Medium

What is the Marginal Rate of Substitution(MRS)?

(A) The rate at which a consumer is willing to substitute one good for another.

(B) Equal to the slope of the indifference curve.

(C) Changes as we move along the indifference curve.

(D) Is constant for perfect substitutes.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q29:

2025: 29 May Shift 1

Micro

>

Consumer Behaviour

Medium

A rational consumer reaches to equilibrium when:

Marginal rate of substitution = Marginal rate of Exchange

Marginal rate of Exchange = Price Ratio

Marginal rate of Substitution = Marginal rate of Transformation

Total Utility = Total Cost

Correct Answer

Option 2

Correct Answer

Explanation

Q30:

2025: 29 May Shift 1

Micro

>

Consumer Behaviour

Medium

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.

(C) Increase in the price of substitute goods.

(D) Increase in the price of goods.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 2

Correct Answer

Explanation

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