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Theory Of Consumer Behaviour

Question

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A consumer consumes two goods. A consumer is said to be in equilibrium, when:

Marginal utility of two goods is equal.

Total utility of two goods is equal.

Price of two goods is equal.

Per rupee marginal utility is equal.

Solution

D.

Per rupee marginal utility is equal.

Some More Questions From Theory Of Consumer Behaviour Chapter

What is demand function? State a consumer's demand function.

Distinguish between 'Change in demand' and 'Change in quantity demanded of a commodity'.

Starting from an initial situation of consumer's equilibrium, suppose that marginal utility of a rupee increases. Will it increase or decrease the quantity demanded of the product?

What are two approaches to attain the state of consumer's equilibrium?

Define indifference curve.

What is meant by marginal rate of substitution (MRS)?

Why is MRS always diminishing?

When does a consumer attain equilibrium according to indifference curve approach?

Give meaning of demand.

Name two determinants of demand.

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