CUET Economics - Micro - Consumer Behaviour | Free Questions - Page 3

Q1:

2025: 28 May Shift 2

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Slope of Budget line	(I) $P_1X_1 + P_2X_2 \leq M$
(B) Horizontal intercept of budget line	(II) $M/P_2$
(C) Vertical intercept of budget line	(III) $-\frac{P_1}{P_2}$
(D) Budget constraints	(IV) $M/P_1$

Choose the correct answer from the options given below:

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

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

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

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

Correct Answer

Option 2

Correct Answer

Explanation

Q2:

2025: 28 May Shift 2

Micro

>

Consumer Behaviour

Easy

There are two goods that are priced at Rs 5 each and are available only in integral units. If a consumer has Rs 20, then the bundle that this consumer can afford to buy is:

(3,3)

(4,5)

(1,3)

(5,4)

Correct Answer

Option 3

Correct Answer

Explanation

Q3:

2025: 28 May Shift 2

Micro

>

Consumer Behaviour

Medium

How the revelation of the fact that junk-foods might be injurious to health can affect the Demand Curve of junk-foods.

Lead to upward shift on demand curve.

Lead to downward shift on demand curve.

Rightward shift in demand curve of junk-foods.

Leftward shift in demand curve of junk-foods.

Correct Answer

Option 4

Correct Answer

Explanation

Q4:

2025: 28 May Shift 2

Micro

>

Consumer Behaviour

Medium

Choose the correct statements in the context of the law of diminishing marginal utility

(A) States that each successive unit of a commodity provides lower marginal utility.

(B) States that each successive unit of a commodity provides higher marginal utility.

(C) Explains why demand curves have a negative slope.

(D) States that the marginal utility from consuming each additional unit of a commodity declines as its consumption increases, while keeping consumption of other commodities constant.

Choose the correct answer from the options given below:

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

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

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

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

Correct Answer

Option 4

Correct Answer

Explanation

Q5:

2025: 28 May Shift 1

Micro

>

Consumer Behaviour

Medium

Why indifference curves are convex to origin?

Due to the constant market rate of exchange.
Due to the increasing marginal rate of substitution.
Due to the constant marginal rate of substitution.
Due to a diminishing marginal rate of substitution.

Due to the constant market rate of exchange.

Due to the increasing marginal rate of substitution.

Due to the constant marginal rate of substitution.

Due to a diminishing marginal rate of substitution.

Correct Answer

Option 4

Correct Answer

Explanation

Q6:

2025: 28 May Shift 1

Micro

>

Consumer Behaviour

Medium

How would the decrease in the price of Good-X impact the budget line, when the price of Good-Y and Income remain unchanged?

The intercept points of both Good-X and Good-Y will shift outward.
The intercept point of Good-X will shift outward and the intercept point of Good-Y will remain unchanged.
The intercept point of Good-X will shift inward and the intercept point of Good-Y will remain unchanged.
The intercept points of both Good-X and Good-Y will shift inward.

The intercept points of both Good-X and Good-Y will shift outward.

The intercept point of Good-X will shift outward and the intercept point of Good-Y will remain unchanged.

The intercept point of Good-X will shift inward and the intercept point of Good-Y will remain unchanged.

The intercept points of both Good-X and Good-Y will shift inward.

Correct Answer

Option 2

Correct Answer

Explanation

Q7:

2025: 28 May Shift 1

Micro

>

Consumer Behaviour

Easy

Which of the following would appropriately define a budget set?

$P_1X_1+P_2X_2 \ge M$ .

$P_1X_1+P_2X_2 < M$ .

$P_1X_1+P_2X_2 > M$ .

$P_1X_1+P_2X_2 \le M$ .

Correct Answer

Option 4

Correct Answer

Explanation

Q8:

2025: 28 May Shift 1

Micro

>

Consumer Behaviour

Medium

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?

-2.5

-0.66

-3

0.66

Correct Answer

Option 3

Correct Answer

Explanation

Q9:

2025: 27 May Shift 2

Micro

>

Consumer Behaviour

Medium

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:

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

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

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

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

Correct Answer

Option 2

Correct Answer

Explanation

Q10:

2025: 27 May Shift 2

Micro

>

Consumer Behaviour

Medium

Which of the following statements are correct:

(A) Consumer's preferences are monotonic: If and only if between any two bundles, the consumer prefers the bundle which has more of at least one of the goods and no less of the other good as compared to the other bundle.

(B) The tendency for the MRS to fall with increase in quantity of goods is known as the Law of Diminishing Marginal Rate of Substitution.

(C) A decrease in income causes a parallel outward shift of the budget line.

(D) The budget set is the collection of all bundles that the consumer can buy with their income at the prevailing market prices.

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

Q11:

2025: 27 May Shift 2

Micro

>

Consumer Behaviour

Medium

If the price of a commodity increases by 20%, its demand drops by 20%. Then how it will affect the expenditure?

Decline in expenditure.

Rise in expenditure.

No change in expenditure.

Small increase in expenditure.

Correct Answer

Option 3

Correct Answer

Explanation

Q12:

2025: 27 May Shift 2

Micro

>

Consumer Behaviour

Easy

An increase in the price of socks is likely to decrease the demand for shoes and a decrease in the price of socks is likely to increase the demand for shoes. Socks and shoes are:

Giffen goods.

Substitutes goods.

Complementary goods.

Inferior goods.

Correct Answer

Option 3

Correct Answer

Explanation

Q13:

2025: 27 May Shift 2

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

The total sum that the consumer has to spend on wheat in 2025?

Rs 1,350

Rs 1,400

Rs 500

Rs 900

Correct Answer

Option 1

Correct Answer

Explanation

Q14:

2025: 27 May Shift 2

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

The total sum consumer will spends on cloth in 2025?

Rs 900

Rs 1,400

Rs 600

Rs 1350

Correct Answer

Option 3

Correct Answer

Explanation

Q15:

2025: 27 May Shift 2

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

The total sum consumer spends on cloth in 2022?

Rs 900

Rs 500

Rs 400

Rs 600

Correct Answer

Option 2

Correct Answer

Explanation

Q16:

2025: 27 May Shift 2

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

The total sum that the consumer has to spend on wheat in 2022?

Rs 900

Rs 500

Rs 400

Rs 600

Correct Answer

Option 1

Correct Answer

Explanation

Q17:

2025: 27 May Shift 2

Micro

>

Consumer Behaviour

Easy

Macroeconomic Variables

In an economy where two goods, wheat and cloth, are produced. A representative consumer buys 90 kg of wheat and 5 pieces of cloth in a year. Suppose in the year 2022 the price of a kg of wheat was Rs 10 and a piece of cloth was Rs 100. The prices of a kg of wheat and a piece of cloth went up to Rs 15 and Rs 120 respectively in the year 2025. It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders.

What is Consumer Price Index?

129.29 (approximately).

149.29 (approximately).

139.29 (approximately)

159.29 (approximately).

Correct Answer

Option 3

Correct Answer

Explanation

Q18:

2025: 26 May Shift 2

Micro

>

Consumer Behaviour

Hard

Anand consumes lesser units of good X when its price falls but more units of X when his income rises. Which of the following statements is true about good X.

Good X is an inferior good for Anand but not a Giffen good.

Good X is a Giffen good for Anand but not inferior.

Good X is normal good for Anand.

Good X is both Inferior and Giffen good for Anand.

Correct Answer

Option 4

Correct Answer

Explanation

Q19:

2025: 26 May Shift 2

Micro

>

Consumer Behaviour

Medium

Lata likes to eat burgers and has already eaten two. Her marginal utility from the last burger she consumes is 90 utils. If the price of burger is Rs. 25 per unit and marginal utility of a rupee is 3 utils, then?

Lata should increase the consumption of burgers to attain equilibrium.

Lata should have consumed lesser burgers to attain equilibrium.

Lata is in equilibrium so she should not change the level of consumption.

The given information is insufficient to determine the consumption behaviour of Lata.

Correct Answer

Option 1

Correct Answer

Explanation

Q20:

2025: 26 May Shift 2

Micro

>

Consumer Behaviour

Medium

A consumer spends all his income of Rs 6000 on two goods - Food and clothing and is buying 12 units each of both the goods. At the present level of consumption, the marginal rate of substitution of clothing for food is 3. The price of food per unit is Rs. 400 whereas that of clothing is Rs. 100. What should a consumer do to attain the equilibrium?

He should reduce the consumption of food and increase the consumption of clothing.

He should increase the consumption of food and reduce the consumption of clothing.

He should reduce the consumption of both the goods.

He shouldn't change his consumption level as he is already at equilibrium.

Correct Answer

Option 1

Correct Answer

Explanation

Q21:

2025: 26 May Shift 2

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Marginal rate of substitution	(I) Slope of Budget line
(B) MUₓ/MUᵧ=Pₓ/Pᵧ	(II) more of at least one good and no less of the other good
(C) -(Pₓ/Pᵧ)	(III) Law of equi marginal utility
(D)Monotonic Preferences.	(IV) Slope of Indifference curve

Choose the correct answer from the options given below:

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

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

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

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

Correct Answer

Option 4

Correct Answer

Explanation

Q22:

2025: 26 May Shift 2

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Decrease in consumer's income	(I) Budget line becomes steeper
(B) Increase in price of Good X	(II) Parallel and leftward shift in the budget line
(C) Equal reduction in price of both goods X and Y	(III) Budget line becomes flatter
(D) Increase in price of Good Y	(IV) No change in the slope of the budget line

Choose the correct answer from the options given below:

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

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

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

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

Correct Answer

Option 3

Correct Answer

Explanation

Q23:

2025: 22 May Shift 2

Micro

>

Consumer Behaviour

Medium

Arrange the following concept emerges in context of consumer equilibrium.

(A) Transfer his expenditure from Good Y to Good X.

(B) Sacrifice more of Good Y to gain Good X.

(C) Till, Marginal Rate of Substitution (MRSxy) = Market Rate of Exchnage.

(D) Suppose, Marginal Rate of Substitution (MRSxy) > Market Rate of Exchnage.

Choose the correct answer from the options given below:

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

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

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

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

Correct Answer

Option 2

Correct Answer

Explanation

Q24:

2025: 22 May Shift 2

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Parallel inward shift in budget line	(I) M/p₁ > M/p₁'
(B) Parallel outward shift in budget line	(II) M/p₁ < M/p₁'
(C) Budget line steeper	(III) M' < M
(D) Budget line flatter	(IV) M' > M

Choose the correct answer from the options given below:

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

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

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

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

Correct Answer

Option 4

Correct Answer

Explanation

Q25:

2025: 22 May Shift 2

Micro

>

Consumer Behaviour

Medium

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 (MRS) and that of the budget line (price ratio) 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 MRS 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 = Indifference curve.

Indifference curve = Slope of budget line.

Slope of indifference curve = Slope of budget line.

Slope of indifference curve = Budget line.

Correct Answer

Option 3

Correct Answer

Explanation

Q26:

2025: 22 May Shift 2

Micro

>

Consumer Behaviour

Medium

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 (MRS) and that of the budget line (price ratio) 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 MRS 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 indicated by

Slope of Indifference curve.

Slope of Budget line.

Slope of consumer selection.

Marginal rate of substitution.

Correct Answer

Option 2

Correct Answer

Explanation

Q27:

2025: 22 May Shift 2

Micro

>

Consumer Behaviour

Medium

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 (MRS) and that of the budget line (price ratio) 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 MRS 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.

Which of the following indicates the slope of Budget Line?

$(-)P_1/P_2$

$P_1/P_2$

$(-)P_2/P_1$

$P_2/P_1$

Correct Answer

Option 1

Correct Answer

Explanation

Q28:

2025: 22 May Shift 2

Micro

>

Consumer Behaviour

Medium

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 (MRS) and that of the budget line (price ratio) 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 MRS 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.

Which goods are represented by a straight line Indifference Curve?

Complementary Goods.

Substitute Goods.

Joint Products/Goods.

By-Products.

Correct Answer

Option 2

Correct Answer

Explanation

Q29:

2025: 22 May Shift 2

Micro

>

Consumer Behaviour

Medium

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 (MRS) and that of the budget line (price ratio) 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 MRS 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 willing to substitute one good for the other is indicated by:

Monotonic Preferences.

Slope of Indifference curve.

Price ratio.

Slope of Budget line.

Correct Answer

Option 2

Correct Answer

Explanation

Q30:

2025: 22 May Shift 1

Micro

>

Consumer Behaviour

Medium

Which of the following statements are true for the Indifference Curve?

(A). A higher indifference curve gives a greater level of utility.

(B). The indifference curve slopes downwards from right to left.

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

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

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

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

Correct Answer

Option 2

Correct Answer

Explanation

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