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Micro Economics Chapter-2 Consumer Equilibrium Ncert Textbook Questions Solved

The document summarizes key concepts from Micro Economics Chapter 2 on consumer equilibrium. It includes definitions of budget set, budget line, and why budget lines slope downward. It also provides sample questions and answers about utility, total utility, marginal utility, consumer's equilibrium, and indifference curves.

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1K views3 pages

Micro Economics Chapter-2 Consumer Equilibrium Ncert Textbook Questions Solved

The document summarizes key concepts from Micro Economics Chapter 2 on consumer equilibrium. It includes definitions of budget set, budget line, and why budget lines slope downward. It also provides sample questions and answers about utility, total utility, marginal utility, consumer's equilibrium, and indifference curves.

Uploaded by

2061 PRAVEEN.N
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Micro Economics Chapter-2 Consumer Equilibrium

NCERT TEXTBOOK QUESTIONS SOLVED

Question 1. What do you mean by the budget set of a consumer?

Or

Define Budget Set.

Answer: Budget set is the collection of all bundles of goods that a consumer
can buy with his income at the prevailing market prices.

Question 2. What is Budget Line?

Answer: Budget line is a graphical representation which shows all the possible
combinations of the two goods that a consumer can buy with the given income
and prices of commodities. It is also called consumption possibility line.

Question 3. Explain why budget line is downward sloping?

Or

Why is budget line negatively sloped?

Answer: ‘Budget line is downward sloping because if a consumer wants to buy


more of one commodity, he has to buy less of other goods, given money
income.

Question 4. A consumer wants to consume two goods. The prices of the two
goods are Rs 4 and Rs 5 respectively. The consumer’s income is Rs 20.

1. Write down the equation of the budget line.

2. How much quantify of good 1 can the consumer consume if she spends
her entire income on that good?

3. How much of good 2 can she consume if she spends her entire income
on that good?

I. Very Short Answer Type Questions (1 Mark)


Question 1. Define utility.

Answer: Utility is the power or capacity of a commodity to satisfy human


wants.

Question 2. Define total utility.

Answer: Total utility is the sum of all the utilities derived from consumption of
all the units of a particular commodity.

Question 3. How much is total utility at zero level of consumption?

Answer: Zero.

Question 4. How is total utility deriveds from marginal utility?

Answer: TU = MU1 + MU2 + MU3 +————- +

Question 5. Define marginal utility. [AI 2006, Foreign 2006]

Answer: Marginal utility is the additional utility derived from consumption of


an additional unit of a commodity.

Question 6. What is consumer’s equilibrium? [Foreign 2006, CBSE 2009C, AI


2013C]

Answer: Consumer’s equilibrium refers to a situation where a consumer gets


the maximum satisfaction out of his given money income and given market
price.

Question 7. What is meant by MU of one rupee?

Answer: MU of one rupee refers to the utility obtained from purchase of


commodities with one rupee.

Question 8. Define indifference curve. [AI 2013, 2014, 2015]

Answer: Indifference curve refers to the graphical representation of various


combinations of the two goods that provide the same level of satisfaction to a
consumer.

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