Indifference Curve Analysis
Economics ⇒ Consumer and Producer Behaviour
Indifference Curve Analysis starts at 11 and continues till grade 12.
QuestionsToday has an evolving set of questions to continuously challenge students so that their knowledge grows in Indifference Curve Analysis.
How you perform is determined by your score and the time you take.
When you play a quiz, your answers are evaluated in concept instead of actual words and definitions used.
See sample questions for grade 12
A consumer consumes only two goods, X and Y. If the price of X is Rs. 5, price of Y is Rs. 10, and income is Rs. 50, how many units of X can the consumer buy if he spends all his income on X?
Define an indifference curve.
Describe the condition for consumer equilibrium using indifference curve analysis.
Describe the effect on the consumer's equilibrium if the price of one good falls, keeping income and the price of the other good constant.
Explain the concept of a budget line in indifference curve analysis.
Explain the concept of the marginal rate of substitution (MRS).
Explain the difference between cardinal and ordinal utility.
Explain the significance of the tangency point between the budget line and an indifference curve.
Explain why two indifference curves cannot intersect each other.
If a consumer's preferences are inconsistent, what problem does it create in indifference curve analysis?
If the indifference curve is concave to the origin, what does it indicate about the MRS?
If the MRS of X for Y is greater than the price ratio, what should the consumer do to maximize satisfaction?
If the price of both goods increases in the same proportion, what happens to the budget line?
State the main assumption of the indifference curve analysis regarding consumer preferences.
Suppose a consumer has a fixed income of Rs. 100, the price of good X is Rs. 10, and the price of good Y is Rs. 20. What is the equation of the budget line?
What does a higher indifference curve represent?
What happens to the budget line if the income of the consumer increases, keeping prices constant?
What is meant by the term 'monotonic preferences' in indifference curve analysis?
Why are indifference curves convex to the origin?
