Marginal Rate of Substitution

Q. Calculate coefficient of correlation of the following data with rank difference and Karl Pearson's methods:

Economics (Marks)	77	54	27	52	14	35	90	25	56	60
Hindi (Marks)	35	58	60	46	50	40	35	56	44	42

Q.

What is the role of consumers in the market place?

Q. If MPS = 0.30, Autonomous Consumption = Rs 50 crores and Investment = Rs. 100 crores, then Equilibrium Income will be:

1. Rs. 150 crores
2. Rs. 500 crore
3. Rs. 300 crores
4. Rs. 45 crores

Q. Give a reason for each of the following:
$X$ and $Y$ are substitute goods. A rise in the price of $X$ results in a rightward shift of the demand curve of $Y$.

Q. Calculate consumption expenditure in the economy whose equilibrium level of income is 20, 000, autonomous consumption is 500 and marginal propensity to save is 0.5.
(Consumption Expenditure a 10.500)

Q. Why should a consumer purchase more of a commodity when MU must decline as consumption of the commodity increases?

Q. Find national income from the following: Autonomous consumption = 100 Marginal propensity to consume = 0.80 Investment = _______________.

Q. If IC is convex to the origin, MRS should not be diminishing.

1. True
2. False

Q. What change does it make to the equation of consumer's equilibrium when he decides to spend his income on two commodities rather than one?

Q.

Q. Initially $\frac{M{U}_X}{P_X}=\frac{M{U}_Y}{P_Y}$. With a fall in the price of Y, the consumption of the commodity-Y:

1. diminishes
2. increases
3. becomes zero
4. remains constant

Q.
A consumer is in equilibrium when he buys commodities X and Y.
When price of X falls, he starts buying more of X than Y.

1. True
2. False

Q. What do you understand by consumer's equilibrium? Give logical reasoning as to how he reaches his state of equilibrium.

Q. If A and B factors are perfect substitutes, then elasticity of substitution is ________.

1. infinite
2. greater than one
3. zero
4. one

Q. What is the absolute value of the slope of the indifference curve at any point called?

1. none of the above
2. marginal rate of substitution
3. substitution rate
4. marginal rate of indifference