MCQ Questions Chapter 2 Theory of Consumer Behaviour Class 12 Economics

Please refer to MCQ Questions Chapter 2 Theory of Consumer Behaviour Class 12 Economics with answers provided below. These multiple-choice questions have been developed based on the latest NCERT book for class 12 Economics issued for the current academic year. We have provided MCQ Questions for Class 12 Economics for all chapters on our website. Students should learn the objective based questions for Chapter 2 Theory of Consumer Behaviour in Class 12 Economics provided below to get more marks in exams.

Chapter 2 Theory of Consumer Behaviour MCQ Questions

Please refer to the following Chapter 2 Theory of Consumer Behaviour MCQ Questions Class 12 Economics with solutions for all important topics in the chapter.

MCQ Questions Answers for Chapter 2 Theory of Consumer Behaviour Class 12 Economics

Question. The demand curve is: –
(a) Negatively sloped
(b) Positively sloped
(c) Concave to X axis
(d) None of the above

Question.Which of the following is/are the feature(s) of utility?
(a) Subjective in nature
(b) Depend upon urgency of wants
(c) Both (a) and (b)
(d) None of the above 

Question.The want satisfying power of a good is known as ……… .
(a) Utility
(b) Usefulness
(c) Both (a) and (b)
(d) None of these 

Question. Utility ismost closely related to the term
(a) usefulness
(b) satisfaction
(c) necessity
(d) None of these 

Question. Same commodity can give different utility to different persons in the same situation.
Choose from the options below.
(a) True
(b) False
(c) Partially true
(d) Incomplete statement 

Question. Utility and usefulness are one and the same thing.
Choose from the options below.
(a) True
(b) False
(c) Partially true  
(d) Incomplete statement 

Question. Cardinal utility approach was given by ……… .
(a) Prof. Alfred Marshall
(b) Prof. Hicks
(c) Prof. Samuelson
(d) Prof. Gossen 

Question. Utility analysis is criticised for one of its assumption. According to this, utility can be expressed in terms of
(a) cardinal number
(b) ordinal number
(c) Both (a) and (b)
(d) None of these

Question. The unit of utility is known as ……… .
(a) Marginal utility
(b) MUM
(c) Utils
(d) None of these 

Question. A commodity which is useful for a consumer must give utility.
Choose from the options below.
(a) True
(b) False
(c) Partially true
(d) Incomplete statement 

Question. Law of diminishing marginal utility was originally propounded by
(a) Prof. Alfred Marshall
(b) Prof. Hicks
(c) Prof. Samuelson
(d) Prof. Gossen   

Question. Law of DMU does not hold true in the absence of its assumptions.
Choose from the option below.
(a) True
(b) False
(c) Partially true
(d) Incomplete statement   

Question. Law of diminishing marginal utility is also known as ……… .
(a) Fundamental law of consumption
(b) First psychological law of consumption
(c) Both (a) and (b)
(d) Neither (a) nor (b)   

Question. When marginal utility is zero, total utility will be ……… .
(a) maximum
(b) maximum and constant
(c) constant
(d) minimum   

Question. Which of the following is not an assumption of law of diminishing marginal utility?   
(a) Cardinal measurement of utility
(b) No change in consumers income
(c) Different price for same commodity
(d) All of the above 

Question. When total utility increases at a diminishing rate, marginal utility will be
(a) increasing
(b) diminishing
(c) constant
(d) diminishing but positive 

Question. According to Law of DMU, total utility is the slope of marginal utility.
Choose from the option below.
(a) True
(b) False
(c) Partially true
(d) Incomplete statement 

Question. The Law of demand indicates: –
(a) The relationships between the price of the commodity and its quantity demanded.
(b) The relationships between the income of the consumer and its quantity demanded.
(c) The relationships between the price of substitute of a commodity and its quantity demanded.
(d) The relationships between the price of the complimentary of a commodity and its quantity demanded.   

Question.  When total utility increases marginal utility is: –
(a) Negative and increasing
(b) Negative and declining
(c) Zero
(d) Positive and declining 

Question. There is decrease in demand when: –
(a) More is demanded at the same price
(b) A fall in the price of the commodity
(c) Less is demanded at the same price
(d) A fall in the income of the consumer. 

Question. An indifference curve is always: –
(a) Concave to the origin
(b) Convex to the origin
(c) A vertical straight line
(d) A horizontal straight line. 

Question. The statement A=B=10 utils implies: –
(a) An ordinal measure of utility
(b) An ordinal and a cardinal measure of utility
(c) A cardinal measure of utility
(d) None of the above.   

Question. If the MRSxy for individual A exceeds the MRSxy for individual B, it is possible for individual A to gain by giving up: –
(a) X in exchange for more Y from B
(b) Y in exchange for more X from B.
(c) Either X or Y
(d) None of the above 

Question. A commodity which is demanded less when consumer’s income rises, it termed as: –
(a) Inferior
(b) Normal
(c) Giffen
(d) Superior 

Question. The falling part of TU curve shows: –
(a) Falling Marginal Utility
(b) Zero Marginal Utility
(c) Negative Marginal Utility
(d) Rising Marginal Utility   

Question. If MRS is increasing, the indifference curve will be: –
(a) Parallel to the X-axis
(b) Downward sloping concave
(c) Downward sloping convex
(d) Downward sloping straight line  

Question. The ratio of exchange between two goods in indifference curve analysis is shown by: –
(a) The price line
(b) The indifference curve
(c) The indifference map
(d) All of the above. 

Question.When income of the consumer falls the effect on price-demand curve of an inferior goods is: –
(a) Shifts to the right
(b) Shifts to the left
(c) There is upward movement along the curve
(d) There is downward movement along the curve 

Question. At the saturation point for commodity X, the MU is: –
(a) Positive
(b) Negative
(c) Zero
(d) Any of the above. 

Question. The slope of the indifference curve shows: –
(a) The price ratio
(b) Diminishing MRS
(c) Factor substitution
(d) Marginal utility 

Question. A consumer consumes only two goods, if price of the one goods rises, the indifference curve: –
(a) Shifts upward.
(b) Shifts downwards.
(c) Can shift both upwards and downwards.
(d) Does not shift 

Question. An individual’s demand for goods is: –
(a) The amount he will buy at any given price.
(b) The total amount he is able to buy.
(c) His willingness to buy a given quantity at market price.
(d) His ability to buy a given quantity.   

Question. At the point of tangency, the slope of the indifference curve is: –
(a) Smaller than the price line
(b) Greater than the price line
(c) Equal to the price line
(d) None of the above 

Question. Utility in economics means: –
(a) Want satisfying power of a commodity
(b) Pleasure
(c) Happiness
(d) Usefulness 

Question. A rise in the price of a commodity leads to: –
(a) A shift in demand
(b) A rise in demand
(c) A fall in consumer’s real income
(d) A rise in consumer’s real income.

Question. If due to fall in the price of good X, demand for good Y rises, the two goods are: –
(a) Substitutes
(b) Complements
(c) Not related
(d) Competitive 

Question. The consumer will be in equilibrium where there is tangency between price line and indifference curve because at equilibrium point his MRS: –
(a) Is equal to the price ratio.
(b) Is greater than the price ratio.
(c) Is less than the price ratio
(d) Is falling. 

Question.Marginal utility is: –
(a) Total minus average utility
(b) Addition to total utility
(c) Total plus average utility
(d) Total utility divided by the number of units 

Question. If the consumer is below his budget line, the consumer: –
(a) Is not spending all of his income.
(b) May or may not spending all of his income.
(c) Is spending all of his income.
(d) Is in equilibrium. 

Question. If a consumer spends his entire income (M) on Y commodity and nothing on X commodity, he will purchase what quantity of Y commodity?
(a) 𝑀/𝑃𝑦
(b) 5>5/5
(c) MRS>𝑃𝑥/𝑃𝑦
(d) None of the above 

Question. If Marginal Rate of Substitution is consent throughout, the indifference curve will be: –
(a) Parallel to the X-axis
(b) Downward sloping concave
(c) Downward sloping convex
(d) Downward sloping straight line 

Question. If with the rise of good Y, demand for good X rises, the goods are: –
(a) Substitutes
(b) Complements
(c) Not related
(d) Jointly demanded 

Question. When the price of a substitute of commodity X rises, the demand for X: –
(a) Rises
(b) Falls
(c) Remains constant
(d) Any of the above 

Question. If two goods are complements, this means that a fall in the price of one commodity will induce: –
(a) An upward shift in demand for the other commodity
(b) No shift in demand for the other commodity
(c) A downward shift in demand for the other commodity
(d) Any of the above. 

Question. In the typical demand schedule, quantity demanded: –
(a) Varies directly with price.
(b) Varies proportionately with price.
(c) Varies inversely with price.
(d) Is independent of price.   

Question. Demand has reference to: –
(a) A given period of time
(b) A given price
(c) A given period of time and given price
(d) None of the above. 

Question. If Marginal Rate of Substitution is increasing throughout, the indifference curve will be: –
(a) Downward sloping convex
(b) Downward sloping concave
(c) Downward sloping straight line
(d) Upward sloping convex   

Question. the income of the consumer
(d) A fall in th9 Other things being equal a rise in demand can be caused by: –
(a) A rise in the price of the commodity
(b) A fall in the price of the commodity
(c) A rise ine income of the consumer 

Question. A consumer consumes only two goods. If price of one good falls, the difference curve: –
(a) Shift upwards
(b) Shift downwards.
(c) Can shift both upwards or downwards
(d) Does not shift 

Question. “Contraction demand” means: –
(a) Less quantity demanded at a lower price
(b) More quantity demanded at a lower price
(c) Same quantity demanded at a lower price
(d) Less quantity demanded at a higher price 

Question. When income of the consumer rises the impact on price-demand curve of an inferior good is: –
(a) Shifts to the right
(b) Shifts to the left
(c) There is upward movement along the curve
(d) There is downward movement along the curve 

Question. In case of Giffen good like Maize, a fall in its price tends to: –
(a) Make the demand remain constant
(b) Increase the demand
(c) Reduce the demand
(d) Change in demand 

Question. The total utility is maximum when: –
(a) MU is Zero
(b) MU is maximum
(c) AU is maximum
(d) MU is equal to AU

Question. Specific quantity to be purchased against a specific price of the commodity is called: –
(a) Demand
(b) Quantity demanded
(c) Movement along the demand curve
(d) Shift in demand curve   

Question. The law of demand states that: –
(a) When prices rise demand rises.
(b) When prices rise demand falls
(c) When income rises demand rises
(d) When income rises demand falls. 

Question. Which of the following pairs of commodities is an example of substitutes: –
(a) Coffee and Milk
(b) Diamond and soap
(c) Pen and Ink
(d) Mustard and Coconut Oil 

Question. Diagrammatic presentation of consumer’s indifference set is called ?
(a) Indifference curve
b) Utility curve
c) Budget line
d) Transformation curve

Question. Attainable combinations of X and Y are drawn on the assumption that Px and Py are
a) Constant
b) Variable
c) Change in the same ratio
d) Equal to each other

Question. Law of Diminishing Marginal Utility states that when more and more units of a commodity ate consumed, marginal utility:
a) begins to increase
b) remains constant
c) begins to decrease
d) becomes zero 

Question. Ed> 1 represents
a) Elastic demand
b) Inelastic demand
c) Unitary elastic demand
d) None of these 

Question. When total utility is maximum, marginal utility becomes :
a) Unity
b) Negative
c) Zero
d) Positive

Question. If the consumer consume only one commodity ‘X’ he will be in equilibrium when
[Here, MUx= Marginal utility of the good X (in terms of money); Px= Price of good –X]
a) MUx <Px
b) MUx= Px
c) MUx >Px
d) None of these 

Question. What will be the condition of total utility when marginal utility stays positive ?
a) Maximum
b) Diminishing
c) Increasing
d) Minimum 

Question. Budget line indicates :
a) Price ratio
b) Income ratio
c) Cost ratio
d) None of these 

Question. When TU is increasing at a diminishing rate, MU must be :
a) Increasing
b) Decreasing
c) Constant
d) Negative 

Question. Marginal utility of a particular commodity at the point of saturation is :
a) Zero
b) Unity
c) Greater than unity
d) less than unity

Question. Which of the following equations is incorrect ?
a) MU= TUn+2 – TUn+1
b) MU= TU/Q
c) MU= TUn-TUn-1
d) TU= ΣMU 

Question. In which analysis can utility be measured in definite numbers such as 1,2,3,4 etc ?
a) Cardinal utility analysis
b) Ordinal utility analysis
c) Both of these
d) None of these 

Question. Given the fact that MRS between goods X and Y is diminishing , IC is:
a) Convex to the origin
b) Concave to the origin
c) Straight line
d) None of these 

Question. An indifference curve is related to
a) Choice and preferences of the consumer
b) Consumer’s income
c) Prices of goods X and Y
d) Total utility from goods X and Y 

Question. The slope of indifference curves is measured by
a) Marginal rate of transformation
b) Marginal rate of substitution
c) Marginal rate of technical substitution
d) None of these 

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