"The concept of marginal utility is useful for explaining diamond-water Paradox". This statement is

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 paradox is a statement that, despite apparently sound reasoning from true premises, leads to an apparently self-contradictory or logically unacceptable conclusion. A paradox involves contradictory yet interrelated elements that exist simultaneously and persist over time. Some logical paradoxes are known to be invalid arguments but are still valuable in promoting critical thinking. Some paradoxes have revealed errors in definitions assumed to be rigorous, and have caused axioms of mathematics and logic to be re-examined. One example is Russell's paradox, which questions whether a "list of all lists that do not contain themselves" would include itself, and showed that attempts to found set theory on the identification of sets with properties or predicates were flawed. Others, such as Curry's paradox, are not yet resolved. What inference can be made from the above?

A

A paradox is wrong.

B

A paradox is never resolved.

C

A paradox can be useful.

D

None of the above.

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

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

The law of diminishing marginal utility is most useful for explaining the

A

law of supply

B

law of demand

C

curvature of the total cost curve

D

shape of the production possibilities frontier

Marginal utility is equal to average utility at that time when average utility is ----

A

Increasing

B

Maximum

C

Falling

D

Minimum

Marginal utility is equal to average utility at that time when average utility is

A

Increasing

B

Maximum

C

Falling

D

Minimum

Cardinal utility analysis of consumer's behaviour is based on which combination of the following assumptions: (i) Utility is measurable in terms of cardinal number. (ii) Constancy of the marginal utility of money (iii) Utilities of different goods are interdependent (iv) Gossen's first law of consumption Choose the correct answer from the code given below:

A

Only (i) and (ii)

B

Only (i), (ii) and (iv)

C

Only (ii), (iii) and (iv)

D

Only (iii) and (iv)

Assertion (A): Utility will be maximized when the marginal units of expenditure in each direction bring the same increment of utility.
Reason (R): A consumer will try to maximize his 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

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

"The concept of marginal utility is useful for explaining diamond-water Paradox". This statement is

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