Suppose a consumer faces a kinked budget constraint due to quantity rationing. At the optimal bundle, which condition characterizes utility maximization?

MRS lies between the slopes of the two budget segments

MRS equals price ratio everywhere

Suppose a consumer faces a kinked budget constraint due to quantity rationing. At the optimal bundle, which condition characterizes utility maximization?

MRS lies between the slopes of the two budget segments

MRS equals price ratio everywhere

Suppose a consumer faces a kinked budget constraint due to quanti... | Economics MCQ [Updated November 2026] | GkGet

1

Which statement correctly describes the decomposition of the Total Price Effect in consumer demand analysis?

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2

In consumer demand theory, which curve can be directly derived from the Income Consumption Curve (ICC)?

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3

Choose the correct statement regarding demand functions:

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4

Consider two utility functions U = q11.5 q2 and V = q16 q24 + 1.5 ln(q1) + ln(q2). Choose the correct statement:

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5

If a consumer prefers or is indifferent between two consumption bundles, we say that the consumer:

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6

Consider the budget constraint and its shifts. Which of the following are CORRECT? A. A proportionate increase in all prices (Px, Py) with money income M unchanged rotates the budget line inward. B. A lump-sum subsidy shifts the budget line outward in a parallel manner. C. An ad valorem subsidy on good X rotates the budget line outward around the Y-intercept. D. If the price of X rises while the price of Y and income remain unchanged, the X-intercept of the budget line shifts inward but the Y-intercept is unchanged. E. A reduction in income with unchanged prices shifts the budget line inward parallel to itself.

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7

Given below are two statements: Assertion (A): The Slutsky substitution effect is larger (in absolute value) than the Hicksian compensating variation substitution effect for a normal good when price rises. Reason (R): The Slutsky compensation restores the original consumption bundle, while Hicksian compensation only restores original utility; hence Slutsky over-compensates, resulting in a larger substitution effect. Choose the most appropriate answer from the options given below:

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8

Which among the following is a correct statement regarding the Price Effect?

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Suppose a consumer faces a kinked budget constraint due to quantity rationing. At the optimal bundle, which condition characterizes utility maximization?

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Suppose a consumer faces a kinked budget constraint due to quantity rationing. At the optimal bundle, which condition characterizes utility maximization?

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Preparing for Economics?

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