CUET Economics Chapter-Consumer Equilibrium

  • Board
    CBSE
  • Textbook
    NCERT
  • Class
    Class 12
  • Subject
    Economics
  • Chapter
    CUET Economics Chapter-Consumer Equilibrium
  • Chapter Name
    Consumer Equilibrium
  • Category
    CUET (Common University Entrance Test) UG

Important MCQ Questions on CUET Economics Chapter-Consumer Equilibrium with Detailed explanation

HT having an expert teacher of Economics prepared Important MCQ Questions on CUET Economics Chapter-Consumer Equilibrium with Detailed explanations. All the Chapters in the syllabus of CUET Economics are covered with coverage of the entire syllabus. This page is prepared for Chapter-Consumer Equilibrium and covers all important topics of the competitive exam CUET for domain subject test. Check out the chapter-wise CUET Economics MCQ questions. 

MCQ Questions for CUET Economics Chapter-Consumer Equilibrium Set-1

Macroeconomic Economics - MCQ on Consumer Behaviour

Class XII

Q.01. Demand curve is

a) the quantity consumers would like to buy.

b) the quantity consumers are willing to sell.

c) the quantity consumers are willing and able to buy at every income, all other things remaining unchanged.

d) the quantity consumers are willing and able to buy at every price, all other things remaining unchanged.

Answer:

d)

Explanation: The quantity consumers are willing and able to buy at each and every price level, all other things remaining unchanged

Q.02. A fall in price will cause

a) an inward shift of demand.

b) an outward shift of supply.

c) a fall in demand.

d) a higher level of production.

Answer:

c)

Explanation: A fall in price may be by a fall in demand

Q.03. a price increase, other things remaining unchanged leads to

a) shift demand outwards.

b) shift demand inwards.

c) a contraction of demand.

d) an extension of demand.

Answer:

c)

Explanation: This is a movement along the demand curve leading to a fall in the quantity demanded.

Q.04. According to the law of diminishing utility

a) it is maximum with the first unit.

b) increasing units of consumption increase marginal utility.

c) marginal utility falls as more units are consumed.

d) it rises at a falling rate as increasing units are consumed.

Answer:

d) it rises at a falling rate as increasing units are consumed.

Explanation: The extra satisfaction from consuming a unit will normally fall as more units are consumed.

Q.05. If, marginal utility is zero, then

a) total utility is zero.

b) any additional unit of consumption will decrease total utility.

c) any additional unit of consumption will increase total utility.

d) total utility is maximized.

Answer:

d)

Explanation: This means we get no extra utility from consuming another unit.

Q.06. Demand for a normal product may shift outwards if

a) price decreases.

b) substitute price falls.

c) the price of a complementary product rises.

d) income falls.

Answer:

b)

Explanation: Demand for a normal product may shift outwards, if substitute price falls.

Q.07. An increase in the price of a complement good for product A would shift

a) demand for product A outwards.

b) demand for product A inwards.

c) supply for product A outwards.

d) supply for product A inwards.

Answer:

b)

Explanation: An increase in the price of a complement good for product A would shift demand for product A inwards, as complementary goods are purchased together.

Q.08. Supposing the income elasticity is +2 and income increases by 20%. Sales were 50000 units. They will now be

a) 3000.

b) 70000.

c) 5500.

d) 4500.

Answer:

b)

Explanation: This means that a percentage increase in income leads to an increase in quantity demanded that is twice as great; this means sales will increase by 40% to 70000 units.

Q.09. If, a product is a luxury good, then

) demand is inversely related to income.

b) demand is inversely related to price.

c) demand is directly related to price.

d) demand is inversely related to the price of substitutes.

Answer:

c)

Explanation: Luxury goods are products of conspicuous consumption.

Q.10. If, a product is an inferior good, then

a) demand is inversely related to income.

b) demand is inversely related to price.

c) demand is directly related to price.

d) demand is inversely related to the price of substitutes.

Answer:

a)

Explanation: Less of inferior goods are bought when income increases.

MCQ Questions for CUET Economics Chapter-Consumer Equilibrium Set-2

Q.11. If, the cross elasticity of demand is –2, then

a) the products are substitutes and demand is cross-price elastic.

b) the products are substitutes and demand is cross-price inelastic.

c) the products are complementary and demand is cross-price elastic.

d) the products are complementary and demand is cross-price inelastic.

Answer:

c)

Explanation: Supposing a 10% increase in the price of one product reduces the quantity demanded of another product by 20%, then the products are complements and the cross price elasticity is elastic.

Q.12. A decrease in income

a) shifts demand for an inferior product outwards.

b) shifts demand an inferior product inwards.

c) shifts supply for an inferior product outwards.

d) shifts supply for an inferior product inwards.

Answer:

b)

Explanation: Consumers tend to buy less of an inferior good when they have more income.

Q.13. If, the average income increases from Rs. 20,000 p.a. to Rs.22,000 p.a. while the quantity demanded per year increases from 5000 to 6000 units, then

a) demand is price inelastic.

b) the good is inferior.

c) income elasticity is –2.

d) the product is normal.

Answer:

d)

Explanation: The percentage change in demand is +20% while the percentage change in income is +10%. This means the product is normal with an income elasticity of 2.

Q.14. The price decreases from Rs. 20,000 to Rs. 18,000. Quantity demanded per year increases from 50000 to 60000 units, then

a) the price elasticity of demand is –2.

b) the good is inferior.

c) income elasticity is + 0.5.

d) income elasticity is + 2.

Answer:

a)

Explanation: The percentage change in demand is +20% while the percentage change in price is -10%. So the price elasticity of demand is -2.

Q.15. If the price elasticity of demand is unit, then a fall in price

a) will reduce revenue.

b) will leave revenue unchanged.

c) will increase revenue.

d) will reduce cost.

Answer:

b)

Explanation: This means the percentage change in quantity demanded equals the percentage change in price. So a price change will not alter the revenue.

Q.16. For a normal good

a) the price elasticity of demand is negative; the income elasticity of demand is negative.

b) the price elasticity of demand is positive; the income elasticity of demand is negative.

c) the price elasticity of demand is negative; the income elasticity of demand is positive.

d) the price elasticity of demand is positive; the income elasticity of demand is positive.

Answer:

c)

Explanation: For a normal good demand increases as income increases and the quantity demanded falls as price increases.

Q.17. The price elasticity of demand is a negative number, which means

a) demand is price elastic.

b) demand is price inelastic.

c) the demand curve slopes downward.

d) an increase in income reduces the quantity demanded.

Answer:

c)

Explanation: This means that an increase in price causes a fall in quantity demanded; this means the demand curve is sloping downward.

Q.18. Price increases from Rs. 10 to Rs. 12 while the price elasticity of demand is -0.5. The quantity demanded was 5000 units, it will now be

a) 5500 units.

b) 5000 units.

c) 4500 units.

d) 4900 units.

Answer:

c)

Explanation: Any given percentage fall in price leads to an increase in quantity demanded that is half as much; a 20% price increase can reduce the quantity demanded by 10%. This means the quantity demanded will be 4500 units.

Q.19. If, demand is price inelastic, then

a) a price increase must raise profits.

b) a price increase decreases revenue.

c) a price increase increases revenue.

d) a price decrease reduces sales.

Answer:

c)

Explanation: This means that the percentage change in quantity demanded is less than the percentage change in price; this indicates a price increase will increase revenue.

Q.20. For an inferior good

a) the price and income elasticity of demand are negative.

b) the price elasticity of demand is positive while the income elasticity of demand is negative.

c) the price elasticity of demand is negative; the income elasticity of demand is positive.

d) the price and income elasticity of demand are positive.

Answer:

a)

Explanation: For an inferior good demand falls as income increases while the quantity demanded falls as price increases. This means the income elasticity and the price elasticity will both be negative.