Indifference Curve Analysis
Economics ⇒ Consumer and Producer Behaviour
Indifference Curve Analysis starts at 11 and continues till grade 12.
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A consumer is choosing between apples and bananas. If the marginal rate of substitution of apples for bananas is 2, what does this mean?
Explain the concept of a budget line in relation to indifference curves.
Explain the concept of the marginal rate of substitution (MRS) in the context of indifference curves.
Explain the difference between cardinal and ordinal utility.
Explain the meaning of the term 'indifference map'.
Explain why indifference curves are downward sloping from left to right.
A consumer has a fixed income of ₹100. The price of good X is ₹10 and the price of good Y is ₹20. What is the maximum quantity of good X the consumer can buy if they buy only X?
A consumer is choosing between apples and bananas. If the marginal rate of substitution of apples for bananas is 2, what does this mean?
A consumer's budget line shifts to the right. What does this indicate? (1) Increase in income (2) Decrease in income (3) Increase in price of goods (4) Decrease in price of goods
If a consumer moves from one point to another on the same indifference curve, what happens to their level of satisfaction? (1) Increases (2) Decreases (3) Remains the same (4) Cannot be determined
If the marginal rate of substitution is constant, what is the shape of the indifference curve? (1) Convex (2) Concave (3) Straight line (4) L-shaped
If the price of one good falls, what happens to the consumer's budget line? (1) Shifts outward (2) Shifts inward (3) Rotates outward (4) Rotates inward
A consumer is in equilibrium when the budget line is _______ to the highest possible indifference curve.
Fill in the blank: Indifference curve analysis is based on the concept of _______ utility.
Fill in the blank: The higher the indifference curve, the _______ the level of satisfaction.
Fill in the blank: The indifference curve approach assumes that utility is _______ rather than measurable.
State whether the following statement is true or false: Indifference curves can be upward sloping.
True or False: Indifference curve analysis assumes that the consumer is rational.
True or False: Indifference curve analysis can be used to derive the demand curve.
True or False: The concept of indifference curves was introduced by J.R. Hicks and R.G.D. Allen.
