Consumer’s Equilibrium — Indifference Curve Analysis MCQ — Class 11

Test your understanding of Consumer’s Equilibrium — Indifference Curve Analysis with 20 free questions across Easy and Moderate. Hard and Extreme require Premium. Choose a level in the interactive quiz to answer questions and review explanations.

Open interactive chapter quizzes

Key concepts to revise

Indifference set

Indifference set: a set of commodity combinations that give the consumer the same level of satisfaction

Indifference curve

Indifference curve: a curve joining combinations of two goods that provide equal satisfaction

Marginal Rate of Substitution

Marginal Rate of Substitution: the amount of one good the consumer is willing to sacrifice for one more unit of another while maintaining the same satisfaction

Diminishing MRS

Diminishing MRS: as the consumer gets more of one good, the amount of the other good willingly sacrificed for additional units tends to fall

Convex indifference curve

Convex indifference curve: the usual IC shape resulting from diminishing marginal rate of substitution

Higher indifference curve

Higher indifference curve: an indifference curve farther from the origin represents a higher satisfaction level under monotonic preferences

Non-intersection of indifference curves

Non-intersection of indifference curves: two indifference curves cannot intersect because that would create contradictory satisfaction rankings

Budget set

Budget set: all combinations of goods affordable with the consumer’s income at given prices

Budget line

Budget line: combinations of two goods that exactly exhaust the consumer’s income at given prices

IC consumer equilibrium

IC consumer equilibrium: the highest attainable indifference curve is reached where the budget line is tangent to a convex IC, so MRS equals the price ratio

Try these sample MCQs

1. Which concept best matches this situation? Bundles A and B are different but the consumer is equally satisfied with both.

  1. Indifference curve
  2. Indifference set
  3. Diminishing MRS
  4. Non-intersection of indifference curves
Check answer and explanation

Indifference set. Indifference set: a set of commodity combinations that give the consumer the same level of satisfaction

2. Which concept best matches this situation? The consumer is indifferent among all bundles lying on one curve.

  1. Marginal Rate of Substitution
  2. Convex indifference curve
  3. Indifference curve
  4. Budget set
Check answer and explanation

Indifference curve. Indifference curve: a curve joining combinations of two goods that provide equal satisfaction

3. Which concept best matches this situation? The consumer gives up fewer units of Y for each additional unit of X.

  1. Diminishing MRS
  2. Higher indifference curve
  3. Budget line
  4. Marginal Rate of Substitution
Check answer and explanation

Marginal Rate of Substitution. Marginal Rate of Substitution: the amount of one good the consumer is willing to sacrifice for one more unit of another while maintaining the same satisfaction

After the quiz

Write down the concepts you missed. Explain each one in your own words, give an example, and attempt the level again without notes. A high score on a short quiz does not replace revision of the whole chapter.

Continue Economics revision

Related chapter quizzes