Consumer’s equilibrium is a situation where the consumer spends his 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 analyze your understanding of the topic. The answers are also given for your reference.
Consumer Equilibrium Utility Analysis MCQs
Question 1
The term ‘marginal’ in economics means
A) Additional
B) Unimportant
C) Minimum Unit
D) None of the above
Answer: A
Question 2
When marginal is negative, it must be true that
A) The average is positive
B) The average is negative
C) The total is decreasing
D) The total is negative
Answer: C
Question 3
The utility is generally related to
A) Satisfaction
B) Necessary
C) Useless
D) Useful
Answer: A
Question 4
The law that defines the demand curve to slopes downward is known as
A) Diminishing marginal utility
B) Utility maximisation
C) Utility minimisation
D) Consumer equilibrium
Answer: A
Question 5
Indifference curves are convex to the origin because
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 Marginal Utility = 0, Total Utility is
A) Maximum
B) Laws of return
C) Minimum
D) None of the above
Answer: A
Question 7
Diminishing marginal utility is the basis of
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 marginal utilities are
A) Increasing
B) Equal
C) Minimum
D) Highest
Answer: B
Question 9
A consumer’s spending is restricted because of
A) Utility maximisation
B) Budget constraint
C) Demand curve
D) Marginal utility
Answer: B
Question 10
When MU is positive, TU
A) Decreases
B) Is highest
C) Remains constant
D) Increases
Answer: A
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