Online Test — Consumer's Equilibrium
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
The want-satisfying power of a good is called its:
Price
Utility
Cost
Supply
Explanation: Utility is the want-satisfying power of a good.
Question 2 of 15
Total satisfaction from a given quantity of a good is:
Marginal utility
Total utility
Average utility
Price
Explanation: Total utility is the total satisfaction from a quantity.
Question 3 of 15
The extra satisfaction from one more unit is:
Total utility
Marginal utility
Average utility
Surplus
Explanation: Marginal utility is the satisfaction from one more unit.
Question 4 of 15
As more units of a good are consumed, its marginal utility:
Rises
Falls
Stays constant
Becomes infinite
Explanation: By the law of DMU, MU falls as consumption rises.
Question 5 of 15
Total utility is maximum when marginal utility is:
Maximum
Zero
Negative
Rising
Explanation: TU is maximum where MU = 0 (point of satiety).
Question 6 of 15
A consumer in equilibrium gets:
Minimum satisfaction
Maximum satisfaction from given income and prices
Zero satisfaction
Infinite goods
Explanation: Equilibrium = maximum satisfaction from given income and prices.
Question 7 of 15
For a single good, consumer equilibrium is where:
MU = Price
MU = 0
TU = 0
Price = 0
Explanation: Single-good equilibrium is MU = price.
Question 8 of 15
If MU of a good exceeds its price, the consumer will:
Buy more
Buy less
Stop buying
Do nothing
Explanation: MU > P means buy more until MU = P.
Question 9 of 15
With many goods, equilibrium requires the marginal utility per rupee to be:
Equal across all goods
Highest for one good
Zero
Negative
Explanation: Equi-marginal utility: MUₓ/Pₓ = MUᵧ/Pᵧ = ...
Question 10 of 15
An indifference curve shows combinations of two goods giving:
The same satisfaction
Different satisfaction
Zero satisfaction
Equal prices
Explanation: An IC gives the same total satisfaction.
Question 11 of 15
An indifference curve slopes:
Upward
Downward
Vertically
Horizontally
Explanation: An IC slopes downward (more of one good means less of the other).
Question 12 of 15
A higher indifference curve represents:
More satisfaction
Less satisfaction
The same satisfaction
No satisfaction
Explanation: A higher IC means a higher level of satisfaction.
Question 13 of 15
The budget line shows combinations the consumer can:
Afford with his income
Never afford
Only dream of
Produce
Explanation: The budget line shows affordable combinations.
Question 14 of 15
A set of indifference curves is called an:
Indifference map
Budget set
Demand curve
Ogive
Explanation: A family of ICs is an indifference map.
Question 15 of 15
Consumer equilibrium (IC approach) is where the budget line is:
Tangent to the highest attainable IC
Above all ICs
Below the origin
Vertical
Explanation: Equilibrium is tangency of the budget line and the highest reachable IC.