MCQs on Indifference Curve

A graph showing a combination of two goods that give a consumer equal utility and satisfaction is called an indifference curve.

Indifference curves are used in microeconomic studies in order to study the consumer preferences. Each point in the indifference curve shows that a consumer is indifferent towards the two products as each of them give them the same utility.

Following are some of the indifference curve multiple choice questions and answers that will help the students in brushing up their understanding of the concept of indifference curve.

1. Moving along an indifference curve the

A.Consumers prefer some of the consumption points to others.

B.Marginal rate of substitution for a good increases as more of the good is consumed.

C.Marginal rate of substitution is constant.

D.Consumers do not prefer one consumption point to another.

Answer: D

2.The slope indifference curve is equal to:

A. One

B. Marginal utility

C.Marginal rate of substitution

D. None of these

Answer: C

3. Why is the indifference curve convex to origin?

A.Due to continuous decline of marginal rate of substitution

B.Due to law of diminishing marginal utility

C.Due to monotonic preferences

D.Both a and b

Answer: A

4.Which of the following is not the property of indifference curve:

A.Higher the indifference curves higher the level of satisfaction

B.Indifference curve is downward sloping

C.Indifference curve is concave to origin

D.Two indifference curves cannot intersect each other

Answer: C

5.Hicks and Allen believed that utility:

A.Can be measured in cardinal numbers

B.Can be measured in ordinal numbers

C.Cannot be measured

D.Cannot be expressed

Answer: B

6. As we move down the indifference curve left to right, the slope of indifference curve tends to:

A.Unity

B.Zero

C.Decline

D.Rise

Answer: C

7. In indifference map, higher IC indicates:

A.Lower level of satisfaction

B.Higher level of satisfaction

C.Same level of satisfaction

D.Either higher or same level of satisfaction

Answer: B

8. Two indifference curves cannot cut each other because:

A. They represent those combinations of two goods that give the same satisfaction

B. They slope downwards.

C. Each indifference curve represents a different level of satisfaction

D. They are convex to origin

Answer: C

9. An indifference curve is related to:

A.Choices and preferences of consumer

B.Prices of goods X and Y

C.Consumer’s income

D.Total utility from goods X and Y

Answer: C

10. An Indifference curve slope down towards right since more of one commodity and less of another result in:

A.Decreasing expenditure

B.Maximum satisfaction

C.Greater satisfaction

D.Same satisfaction

Answer: D

For finding more such interesting MCQs on various commerce topics visit here

Leave a Comment

Your email address will not be published. Required fields are marked *