Good 'Y' is the substitute for good 'X' if1. A fall in the price of good X leads to the fall in the marginal utility of good Y.2. A fall in the price of good X leads to the fall in the quantity purchased of good Y. Select the correct answer

Good 'Y' is the substitute for good 'X' if<br>1. A fall in the price of good X leads to the fall in the marginal utility of good Y.<br>2. A fall in the price of good X leads to the fall in the quantity purchased of good Y. Select the correct answer

Which of the following are not the assumptions related to the theory of consumer behaviour as per the cardinal utility approach?
1. Rational consumer
2. Unlimited money income
3. Utility cardinally measurable
4. Diminishing marginal utility of money
5. Constant marginal utility of commodities
6. Maximisation of satisfaction
7. Utility is additive

A

1, 3, 5 and 7

B

2, 4 and 5

C

1, 3, 4 and 5

D

Both 6 and 7

A fruit seller purchased certain quantity of fruits on Mon and can sell half of it in the morning and from the remaining he could sell half in the evening on the same day. On Tue, he purchased similar quantity as he purchased on Mon and mixes it with remaining quantity of fruits from previous day and sold 3/4th of total on that day if he left with 15 kg fruits on Tue, then how much purchased on Mon?

A

64 kg

B

48 kg

C

36 kg

D

72 kg

Five friends P, Q, X, Y and Z purchased some notebooks. The relevant information is given below: 1. Z purchased 8 notebooks more than X did. 2. P and Q together purchased 21 notebooks. 3. Q purchased 5 notebooks less than P did. 4. X and Y together purchased 28 notebooks. 5. P purchased 5 notebooks more than X did. If each notebook is priced ₹40, then what is the total cost of all the notebooks?

A

₹2,600

B

₹2,400

C

₹2,360

D

₹2,320

Assertion (A) Total utility will be maximum, when marginal utility to price of respective products are equal.
Reason (R) Deviation from this situation leads to reduction in maximum utility.

A

Both (A) and (R) are true

B

Both (A) and (R) are false

C

(A) is true, but (R) is false

D

(A) is false, but (R) is true

When labour is plotted on X-axis and capital is plotted on Y-axis and an iso-quant is prepared, then which of the following statements is/are false ? (a) Marginal rate of technical substitution of labour for capital is equal to the slope of the iso-quant. (b) Marginal rate of technical substitution of labour for capital is equal to change in the units of capital divided by the change in the units of labour. (c) Marginal rate of technical substitution of labour for capital is the ratio of marginal productivity of capital to marginal productivity of labour.

A

(a) and (b) statements

B

Only (c) statement

C

Only (a) statement

D

Only (b) statement

When labour is plotted on X-axis and capital is plotted on Y-axis and an isoquant is prepared, then which of the following statement(s) is/arefalse?
1. Marginal rate of technical substitution of labour for capital is equal to the slope of the iso-quant.
2. Marginal rate of technical substitution of labour for capital is equal to change in the units of capital divided by the change in the units of labour.
3. Marginal rate of technical substitution of labour for capital is the ratio of marginal productivity of capital to marginal productivity of labour.

A

Both 1 and 2

B

Only 3

C

Only 1

D

Only 2

From the following two statements of Assertion (A) and Reason (R), indicate the correct answer.
Assertion (A) From the marginal costing approach point of view, the marginal cost is compared with the purchase price.
Reason (R) If the marginal cost is less than the purchase price it should be purchased rather than manufactured.

A

Both (A) and (R) are correct

B

(A) is correct, but (R) is not correct

C

(A) is not correct, but (R) is correct

D

Both (A) and (R) are incorrect

A purchased a machine from B at a price of purchased price to B + 15%. After using it for one year and depreciation at the rate of 8% p.a., he sold the same to C at a profit of 5%. C spent Rs. 8910 on its repairs to enhance the efficiency of the machine and treats the same as a part of the cost. He further sold the same to D at a price of purchased price + 10%. Value of the machine in the book of D is Rs. 105600 after one year provided depreciation is charged at a rate of 20% p.a. Calculate the actual cost of the machine at which it is purchased by B.

A

Rs. 200000

B

Rs. 300000

C

Rs. 100000

D

Rs. 150000

E

Rs. 125000

Suppose that there are two goods, X and Y, facing a consumer. The prices are P_x = Rs. 4 and P_y = Rs. 5. He has Rs. 110 to spend on these goods. Suppose, he is currently buying 15 units of good X (with marginal utility equal to 40) and 10 units of good Y (with marginal utility equal to 45).
In the above context, which one of the following statements is correct?

A

His total utility will increase if he reallocates his spending towards more of good X and less of good Y

B

His total utility will increase if he spends more on good Y and less on good X

C

His total utility will increase if he spends less on both the goods

D

His total utility is being maximized subject to the budget constraint he is facing

Marginal cost is equal to marginal revenue, average cost is equal to average revenue, average revenue is equal to marginal revenue and average cost is equal to marginal cost. This is the condition of
1. long period equilibrium for a firm under monopoly
2. short period equilibrium for a firm under oligopoly
3. long period equilibrium
4. long period equilibrium for a firm under perfect competitions
Select the correct answer

A

Both 1 and 4

B

Both 3 and 4

C

Both 3 and 1

D

Only 1

Good 'Y' is the substitute for good 'X' if
1. A fall in the price of good X leads to the fall in the marginal utility of good Y.
2. A fall in the price of good X leads to the fall in the quantity purchased of good Y. Select the correct answer

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