 Posted by Anjali Kaur on Sep 12, 2021 # What is consumer behavior?

In this post, you will find some questions on the introduction to microeconomics and consumer theory. We will learn what is consumer behavior?

At the end of this post, you can download the PDF file.

## 1. How does the budget line change if a consumer’s income increases from Rs 20 to Rs 40 but the price remain unchanged?

Solution: If the income of the consumer increases, then the budget line shifts to the right or increases.

## 2. What is the slope of the demand curve?

Solution: Change in Price / Change in quantity demanded

## 3. Draw indifference map.

Solution: A collection of more than one indifference curve is known as the indifference map.

## 4. Which of the of following can be referred to as ‘point satiety?

1. Marginal Utility is negative
2. Marginal utility is zero
3. Total Utility is rising
4. Total Utility is falling

Solution: When the consumer reaches its maximum satisfaction level, that point is known as the point of satiety. So, when TU is maximum, then MU is 0. Hence, option 2.

## 5. What happens to MU when TU is maximum and constant?

1. MU becomes zero
2. MU becomes negative
3. MU declines
4. MU remains same

Solution: MU becomes zero.

## 6. Hitesh buys pizza and coke. The marginal utility of last piece of pizza is 80 utils and of last sip of coke is 40 utils. The price of pizza is { 40 and that of coke is ? 20. This means that Hitesh is buying

1. more pizza and less coke.
2. more coke and less pizza.
3. both at optimal level.
4. same quantity of both.

Solution: Both at an optimal level.

## 7. Draw Indifference curve.

Solution: The indifference curve is a curve that shows the combination of commodities that provide the same level of satisfaction to the consumer.

Solution:

## 9. Draw a budget line and write its equation with slope.

Solution. XP1 + YP2 = M

Slope of the budget line = -p1/p2

## 10. A consumer consumes only two goods X and Y. Her money income is Rs 24 and the prices of a goods X and Y are Rs 4 and Rs 2 respectively. Answer the following questions:

1. Can the consumer afford a bundle 4X and 5Y? Explain.
2. What will be the MRS when the consumer is in equilibrium? Explain.

Solution:

1. Let’s try,

Px is 4 and Py is 2.

4 X 4 + 2 X 5 = 26

Since the bundle is more than the income. He cannot afford this bundle.

2. In equilibrium

MRS = P1/P2

MRS = 4/2 = 2

## 11. Suppose there are three consumers in a particular market: Ashok, Aakash and Mayank. Their demand schedules are given in the following table:

(a) Derive the market demand schedule.

(b) Suppose Aakash drops out of the market. Derive the new market demand schedule.

(c) Suppose Aakash stays in the market and another person, Dakshdeep, joins the market, whose quantity demanded at any given price is half of that of Ashok. Derive the new market demand schedule.

Solution:

(a)

You can read more related posts:

Happy Learning!

Disclosure: Some of the links on the website are ads, meaning at no additional cost to you, I will earn a commission if you click through or make a purchase. Please support me so that I can continue writing great content for you.

### Other posts you might like... Learn with Anjali started because there wasn't an easy-to-consume resource to help students with their studies. Anjali is on single-minded mission to make you successful!