DELHI PUBLIC SCHOOL AGRA

(Under the Aegis of the Delhi Public School Society, East of Kailash, New Delhi)
Half Yearly Examination Revision Worksheet
CLASS – XI Economics
Chapter - 4 Consumer's Equilibrium – Ordinal Approach
Very short Questions:
1. Assertion (A): A higher indifference curve represents a higher level of satisfaction
Reason (R): Due to 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.
2. Assertion (A): The consumer is assumed to be rational.
Reason (R): He aims at maximizing his benefits from consumption, given his income andprices of the 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.
3. Who propounded the ordinal utility theory of consumer equilibrium?
a) Marshall b) Pigou c) Hicks and Allen d) Ricardo
4. Slope of budget line or price line is _______.
(a) –Px/Py
(b) –Py/Px
(c) +Px/Py
(d) +Py/Px
5. Indifference curve is:
(a) Convex to the origin (b)Concave to the origin
(c) Both (a) and (b) true (d) All of these false
SHORT AND LONG ANSWER TYPE QUESTIONS: 3/4/6 MARKS
6. Giving reasons, state why the following two conditions must be satisfied when aconsumer is in
equilibrium.
a) A budget line must be tangent to an indifference curve.
b) Marginal rate of substitution must be diminishing.
7. Explain the three properties of indifference curve.
8. Why is an indifference curve negatively sloped? Explain.
9. What do you mean by budget line? What is the reason of change in budget line?
10.Why does two indifference curves not intersect each other?
11.Why is budget line downward sloping?
12.Define Budget Set, Budget Constraint and Slope of Budget Line.
13.Explain with the help of a numerical example, the meaning of diminishing MRS.
14. A consumer consumes only two goods. For the consumer to be in equilibrium, why must Marginal Rate of
Substitution between the two goods must be equal to the ratio of prices ofthese two goods? Is it enough to
ensure equilibrium?
15.A consumer consumes only two goods X and Y. His money income is Rs 200 and the prices of Goods X and Y are Rs
40 and Rs 20 respectively. Answer the following questions:
(i) Can the consumer afford a bundle 4X and 5Y? Explain.
(ii) What will be the MRSxy when the consumer is in equilibrium? Explain.
(iii) Draft the Budget line equation.