Class 12 Micro Economics - Chapter Theory of Consumer Behaviour NCERT Solutions | Suppose a consumer wants to consume two
Suppose a consumer wants to consume two goods which are available only in
integer units. The two goods are equally priced at Rs 10 and the consumer’s
income is Rs 40.
(i) Write down all the bundles that are available to the consumer.
(ii) Among the bundles that are available to the consumer, identify those which cost her exactly Rs 40.
P1 = Rs.10
P2= Rs.10
M = Rs. 40
Budget set = P1X1+P2x2≤ M
10X1+10x2 ≤ 40
The bundles that are available to the consumer should cost less than or equal to Rs40.
Horizontal intercept =
Vertical intercept =
Slope =
The bundles in the shaded region (∆AOB) are all available
to the consumer, including the bundles lying on the line
AB.
(0, 0) (0, 1) (0, 2) (0, 3) (0, 4)
(1, 0) (1, 1) (1, 2) (1, 3) (1, 4)
(2, 0) (2, 1) (2, 2) (2, 3) (2, 4)
(3, 0) (3, 1) (3, 2) (3, 3) (3, 4)
(4, 0) (4, 1) (4, 2) (4, 3) (4, 4)
(ii) The coordinates that lie on the line AB cost exactly the same as the income of the consumer. The bundles are as follows:
(0,4) (1,3) (2,2) (3,1) (4,0)
More Questions From Class 12 Micro Economics - Chapter Theory of Consumer Behaviour
- Q:-
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.
(i) Write down the equation of the budget line.
(ii) How much of good 1 can the consumer consume if she spends her entire
income on that good?
(iii) How much of good 2 can she consume if she spends her entire income on
that good?
(iv) What is the slope of the budget line?
Questions 5, 6 and 7 are related to question 4. - Q:-
Suppose your friend is indifferent to the bundles (5, 6) and (6, 6). Are the preferences of your friend monotonic?
- Q:-
Consider the demand curve D (p) = 10 – 3p. What is the elasticity at price 53?
- Q:-
Suppose there are 20 consumers for a good and they have identical demand functions:
d(p)=10–3pd(p)=10–3p for any price less than or equal to 103103 and d1(p)=0d1(p)=0 at any price greater than 103.
- Q:-
What is budget line?
- Q:-
What do you mean by an ‘inferior good’? Give some examples
- Q:-
Explain why the budget line is downward sloping.
- Q:-
Suppose a consumer’s preferences are monotonic. What can you say about her preference ranking over the bundles (10, 10), (10, 9) and (9, 9)?
- Q:-
What do you mean by substitutes? Give examples of two goods which are substitutes of each other.
- Q:-
Explain price elasticity of demand.
Popular Questions of Class 12 Micro Economics
- Q:-
Explain the concept of a production function
- Q:-
What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
- Q:-
Explain market equilibrium.
- Q:-
Discuss the central problems of an economy.
- Q:-
What are the characteristics of a perfectly competitive market?
- Q:-
What is the total product of input?
- Q:-
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
- Q:-
When do we say that there is an excess demand for a commodity in the market?
- Q:-
What do you mean by the production possibilities of an economy?
- Q:-
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
Recently Viewed Questions of Class 12 Micro Economics
- Q:-
List the three different ways in which oligopoly firms may have.
- Q:-
Explain through a diagram the effect of a rightward shift of both the demand and supply curves on equilibrium price and quantity.
- Q:-
How is the optimal amount of labor determined in a perfectly competitive market?
- Q:-
Considering the same demand curve as in exercise 22, now let us understand for free entry and exit of the firms producing commodity X. Also assume the market consists of identical firms producing commodity X. Let the supply curve of a single firm be explained?
q*= 8+3p for p ≥ 20
= 0 for 0 ≤ p ≤ Rs 20
(a) What is the significance of p =20?
(b) At what price will the market for X be in equilibrium? State the reason for your answer.
(c) Calculate the equilibrium quantity and number of firms.
- Q:-
What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
- Q:-
Suppose the demand and supply curve of commodity XX in a perfectly competitive market are given by:
qD =700 - p
qs = 500 + 3p for p ≥ 15
= 0 or 0 ≤ p <15
Assume that the market consists of identical firms. Identify the reason behind the market supply of commodity X being zero at any price less than Rs 15. What will be the equilibrium price for this commodity? At equilibrium, what quantity of X will be produced?
- Q:-
At which point does the SMC curve intersect the SAC curve? Give a reason in support of your answer.
- Q:-
Compute the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is Rs 10.
Quantity Sold TR MR AR 0
1
2
3
4
5
6 - Q:-
Distinguish between microeconomics and macroeconomics.
- Q:-
What is the relation between market price and average revenue of a price-taking firm?
- All Chapters Of Class 12 Micro Economics
- All Subjects Of Class 12