Maximum mark 20. Question 1) The income available to the consumer for spending is called Answers Option 1 Consumption bundle Option 2 Budget Set Option 3 Budget Line Option 4 Consumer's Budget Question 2) Collection of all the bundles that the consumer can buy with his income at the prevailing market is called Answers Option 1 Consumers budget Option 2 Budget set Option 3 Consumer's income Option 4 Consumption bundle Question 3) In the given budget line, movement from AA to BB is due to Answers Option 1 Increase in the price of good 2 Option 2 Decrease in the income Option 3 Increase in the income of the consumer Option 4 Decrease in the price of good 1 Question 4) P1X1 + P2X2 = M is a Answers Option 1 Budget set or budget constrain Option 2 Consumer's income Option 3 Budget line equation Option 4 Budget Question 5) A movement of budget line from AA to AC indicates that Answers Option 1 Price of good 2 increased Option 2 Price of good 2 decreased Option 3 Income of the consumer decreased Option 4 Price of good 1 increased Question 6) 10X1 + 5X2 = 50 , In the given equation , what is the vertical interception ? Answers Option 1 10 Option 2 15 Option 3 5 Option 4 50 Question 7) Consider a budget line equation 6X1 + 6X2 = 60. If the consumer want to spent his entire income on good 1, how much quantity consumer can buy? Answers Option 1 12 Option 2 10 Option 3 6 Option 4 60 Question 8) If the income of the consumer decreases. Then what happen to the budget line? Answers Option 1 Shifts parallel to left Option 2 Pivots from X axis Option 3 Shifts parallel to right Option 4 No change Question 9) Price of good 1 and good 2 are 2 and 5 respectively. Consumer's income is 20. If the price of good 2 changes to 6, then the budget line equation is Answers Option 1 2X1 + 5X2 = 20 Option 2 6X1 + 6X2 = 20 Option 3 6X1 + 5X2 = 20 Option 4 2X1 + 6X2 = 20 Question 10) In the budget equation 5X1 + 5X2 = 50, the consumer can have equal quantity of good 1 and good 2 if he chooses bundle Answers Option 1 (4,5) Option 2 (5,5) Option 3 (5,4) Option 4 (50,50) Question 11) Assume that a consumer can buy 6 units of good 1 and 8 units of good 2. Price of good 1 and good 2 are 6 and 8 respectively. What will be the income of consumer? Answers Option 1 14 Option 2 200 Option 3 100 Option 4 80 Question 12) Cardinal utility analysis was put forwarded by Answers Option 1 JR Hicks Option 2 Alfred Marshall Option 3 PA Samuelson Option 4 Robins Question 13) In the given graph , movement from budget line AA to AB is due to Answers Option 1 Increase in the price of good 1 Option 2 Increase in the price of good 2 Option 3 Increase in income Option 4 Decrease in the price of good 1 Question 14) Price of good 1 (P1x1) and good 2 (P2x2) are 3 and 5 respectively. Income of the consumer is 30. If the prices of both goods doubles, what will be the Budget Line equation? Answers Option 1 3X1 + 10X2 = 30 Option 2 3X1 + 5X2 = 60 Option 3 6X1 + 10X2 = 30 Option 4 6X1 + 5X2 = 30 Question 15) The reason for the downward slope of budget line is Answers Option 1 While income keeping constant, if consumer want to have additional units of good 1, he has to sacrifice quantity of good 2. Option 2 The slope of budget line will be always negative that is Option 3 Convex Preference Option 4 All of the above Question 16) Look at the given graph. What is the reason behind the movement of budget line AA to AB ? Answers Option 1 Decrease in the price of good 2 Option 2 Increase in the price of good 1 Option 3 Decrease in the price of good 1 Option 4 Increase in the price of good 2 Question 17) Select an equation which stands for consumer's budget constrain Answers Option 1 P1 X1 + P2X2 = M Option 2 P1 X1 + P2X2 ≤ M Option 3 P1 X1 + P2X2 ≠ M Option 4 P1 X1 + P2X2 ≥ M Question 18) Any point in a budget line indicates bundles which are Answers Option 1 Exactly equal to prices of goods Option 2 Exactly equal to the price of good 1 Option 3 Exactly equal to the price of good 2 Option 4 Exactly equal to the income of the consumer Question 19) In the below given budget line, point G represents Answers Option 1 Inferior Bundles Option 2 Preferred bundles Option 3 Reduction in resources Option 4 Superior bundles Question 20) Consider the given below picture.The reason behind the movement of budget line AA to AB is due to Answers Option 1 Increase in price of good 2 Option 2 Increase in price of good 1 Option 3 Decrease in price of good 2 Option 4 Decrease in price of good 1 Enable JavaScript
