MCQs on Consumer Equilibrium

Consumer equilibrium is a situation where a consumer spends their salary on purchasing one or more commodities and gets maximum satisfaction. Consumer equilibrium enables a consumer to get the most satisfaction and fulfilment possible from their income.

Given below are important MCQs on consumer equilibrium utility analysis to analyse your understanding of the topic. The answers are also given for your reference.

MCQs on Consumer Equilibrium-Utility Analysis 

Question 1

What does the term ‘marginal’ in economics mean?

A) Additional

B) Unimportant

C) Minimum unit

D) None of the above

Answer: A

Question 2

Which of the following must be true when the marginal is negative?

A) The average is positive.

B) The average is negative.

C) The total is decreasing.

D) The total is negative.

Answer: C

Question 3

What is the utility generally related to?

A) Satisfaction

B) Necessary

C) Useless

D) Useful

Answer: A

Question 4

What is the law that defines the demand curve to slope downward known as?

A) Diminishing marginal utility

B) Utility maximisation

C) Utility minimisation

D) Consumer equilibrium

Answer: A

Question 5

Why are indifference curves convex to the origin?

A) Two goods are perfect complementary goods.

B) Two goods are imperfect substitutes.

C) Two goods are perfect substitutes.

D) None of the above

Answer: B

Question 6

When the marginal utility is equal to zero, what will the total utility be?

A) Maximum

B) Laws of return

C) Minimum

D) None of the above

Answer: A

Question 7

Which of the following is the basis of diminishing marginal utility?

A) Law of demand

B) Laws of return

C) Law of supply

D) None of the above

Answer: A

Question 8

A consumer is in equilibrium when the marginal utilities are ___________ .

A) Increasing

B) Equal

C) Minimum

D) Highest

Answer: B

Question 9

Why is a consumer’s spending restricted?

A) Due to the utility maximisation

B) Due to the budget constraint

C) Due to the demand curve

D) Due to the marginal utility

Answer: B

Question 10

When MU is positive, what happens to TU?

A) It decreases.

B) It becomes the highest.

C) It remains constant.

D) It increases.

Answer: D

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