10 Questions
What does the slope of the indifference curve represent?
Marginal Rate of Substitution (MRS)
Which assumption suggests that consumers prefer more goods to fewer goods?
Non-satiability
What is meant by 'consumer equilibrium'?
The point where marginal utility of one product divided by its price equals the marginal utility of another product divided by its price
What does the cardinal approach of consumer equilibrium emphasize?
Utility measured in quantitative terms
What is typically illustrated by an indifference curve?
All possible combinations of two goods that provide the same level of satisfaction
Which assumption ensures consistency in consumer choices?
Transitivity
What is the slope of the indifference curve from point a to point b if 6 apples are given up for 1 orange?
-6
What does the move from point b to c on the indifference curve depict if 4 apples are given up for 1 orange?
MRS of -4
What does the term 'non-satiability' imply in consumer theory?
Consumers never reach a point of full satisfaction
What does 'completeness' assumption guarantee about consumer preferences?
All combinations of goods can be ranked in order of preference
This quiz covers consumer equilibrium, including the slope of the budget line and indifference curve, and the optimal consumption point.
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