Assertion Reason: Consumer's Equilibrium

1.Assertion (A): Marginal utility diminishes as the consumer consumes more unit of a commodity. Reason (R): Utility derived from each unit of a commodity is less than that of the previous one.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is A)

2.Assertion (A): In cardinal utility analysis, utility is measures in definite numbers such as 1,2,3,4, etc. Reason (R): Cardinal utility is developed by J. R. Hicks and R. G. D. Allen

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D)Assertion (A) is false but Reason (R) is true.

... Answer is C)

3.Assertion (A): Law of diminishing marginal utility states that as more and more units of a commodity are consumed, marginal utility derived from every additional unit must decline. Reason (R): When marginal utility is negative, total utility will be decreasing.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is B)

4.Assertion (A): An indifference curve is convex to the origin because of increasing marginal rate of substitution. Reason (R): Marginal utility of first unit is equal to total utility.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is D)

5.Assertion (A): Indifference curve are always convex to the origin. Reason (R): Indifference curve is convex to the origin because of diminishing marginal rate of substitution.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is A)

6.Assertion (A): In case of a single commodity, a consumer will be in equilibrium when MU= Price. Reason (R): If total utility is same, marginal utility may be negative or positive.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is C)

7.Assertion (A):Want satisfying power of a commodity is called utility. Reason (R): When more units of a commodity is consumed, utility will decrease.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is C)
When more units of a commodity is consumed, then marginal utility will decrease.

8.Assertion (A): A consumer is in equilibrium when indifference curve is tangent to the budget line. Reason (R): All points on the budget line give equal level of satisfaction.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is C)

9.Assertion (A): When total utility is maximum, marginal utility is also maximum. Reason (R): Addition of marginal utility is total utility.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is D)
when total utility is maximum, marginal utility is zero.

10.Assertion (A): In case of indifference curve analysis, a consumer is in equilibrium if MRSxy= Px/Py. Reason (R): Total utility increases as long as marginal utility is positive.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is B)

11.Assertion (A): Budget line will shift to the right if income of the consumer increases. Reason (R): Budget line is also called consumption possibility line.

A)Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is D)

12.Assertion (A): Budget line is a graphical representation which shows all the possible combination of the two goods that a consumer can buy with the given income and prices of the commodities. Reason (R): Budget set is the collection of all bundles of goods that a consumer can buy with his income at the prevaling market prices.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is B)

13. Assertion (A): Usefulness and utility of the commodity are directly linked. Reason (R): Consumption beyond point of satiety leads to disutility.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is D)

14.Assertion (A): Two indifference can never intersect with each other. Reason (R): Different points on curve represent different slope of indifference curve.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is B)

15.Assertion (A): Law of diminishing marginal utility will operate even if consumption is not continuous. Reason (R): Marginal utility is zero when total utility is maximum.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is D)

16.Assertion (A): Budget constraint shows what a consumer can afford to spend with his given income. Reason (R): Budget line is downward sloping curve that represents different bundles which a consumer can purchase by spending his entire income at the given prices.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is B)

17.Assertion (A): The slope of indifference curve is convex to the origin. Reason (R): Indifference curve is convex to the origin because of diminishing marginal rate of substitution.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is A)

18.Assertion (A):An indifference curve which shifts to the right represents higher level of satisfaction. Reason (R): Right side shift of indifference curve represent consumption of more of X good or more of Y good or more of both X and Y goods.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is A)

19.Assertion (A): It is assumed that consumer is monotonic under indifference curve analysis. Reason (R):Monotonic preference means a consumer always likes to consume more of at least one commodity but not less of other commodity.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is A)

20.Assertion (A): To be equilibrium, the slope of an indifference curve should be equal to the slope of a budget line. Reason (R): An difference curve shows that a consumer always consumed two goods.

A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.

... Answer is B)