MCQ Questions on Indifference Curve
MCQ Questions on Indifference Curve
1. Moving along an indifference curve the
(a) Consumers prefer some of the consumption points to others.
(b) Marginal rate of substitution for a good increases as more of the good is consumed.
(c) Marginal rate of substitution is constant.
(d) Consumers do not prefer one consumption point to another.
Answer: (d)
2.The slope indifference curve is equal to:
(a) One
(b) Marginal utility
(c) Marginal rate of substitution
(d) None of these
Answer: (c)
3. Why is the indifference curve convex to origin?
(a) Due to continuous decline of marginal rate of substitution
(b) Due to law of diminishing marginal utility
(c) Due to monotonic preferences
(d) Both a and b
Answer: (a)
4.Which of the following is not the property of indifference curve:
(a) Higher the indifference curves higher the level of satisfaction
(b) Indifference curve is downward sloping
(c) Indifference curve is concave to origin
(d) Two indifference curves cannot intersect each other
Answer: (c)
5.Hicks and Allen believed that utility:
(a) Can be measured in cardinal numbers
(b) Can be measured in ordinal numbers
(c) Cannot be measured
(d) Cannot be expressed
Answer: (b)
6. As we move down the indifference curve left to right, the slope of indifference curve tends to:
(a) Unity
(b) Zero
(c) Decline
(d) Rise
Answer: (c)
7. In indifference map, higher IC indicates:
(a) Lower level of satisfaction
(b) Higher level of satisfaction
(c) Same level of satisfaction
(d) Either higher or same level of satisfaction
Answer: (b)
8. Two indifference curves cannot cut each other because:
(a) They represent those combinations of two goods that give the same satisfaction
(b) They slope downwards.
(c) Each indifference curve represents a different level of satisfaction
(d) They are convex to origin
Answer: (c)
9. An indifference curve is related to:
(a) Choices and preferences of consumer
(b) Prices of goods X and Y
(c) Consumer’s income
(d) Total utility from goods X and Y
Answer: (c)
10. An Indifference curve slope down towards right since more of one commodity and less of another result in:
(a) Decreasing expenditure
(b) Maximum satisfaction
(c) Greater satisfaction
(d) Same satisfaction
Answer: (d)
