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Cheat sheet · Class 11 · CBSE · Commerce Economics

Microeconomics: Theory of Consumer Behaviour cheat sheet

The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.

CBSE Class 11 · Economics

Cheat sheet

Chapter 9Microeconomics: Theory of Consumer Behaviour

Equilibrium: MU per rupee equal across goods (cardinal) or MRS = price ratio (ordinal).

1. Utility Analysis

  • Law of diminishing marginal utility.
  • One good: equilibrium when MUx=PxMU_x = P_x (MU in money).
  • Two goods: MUxPx=MUyPy\dfrac{MU_x}{P_x} = \dfrac{MU_y}{P_y}.

2. Indifference Curves

  • Downward sloping, convex (diminishing MRS).
  • Higher IC = more satisfaction.
  • Never intersect.
MRS=ΔyΔxMRS = \dfrac{\Delta y}{\Delta x}

3. Budget Line & Equilibrium

Pxx+Pyy=MP_xx + P_yy = Mslope=−PxPy\text{slope} = -\dfrac{P_x}{P_y}

Equilibrium: budget line tangent to the highest IC, MRS=PxPyMRS = \dfrac{P_x}{P_y}.

4. Demand

  • Law of demand: price ↑ ⇒ quantity demanded ↓ (other things constant).
  • Movement along curve (own price) vs shift (income, related prices, tastes).
  • Normal goods: demand ↑ with income; inferior goods: demand ↓.
  • Substitutes (tea, coffee) and complements (car, petrol).
ed=−%ΔQ%ΔPe_d = -\dfrac{\%\Delta Q}{\%\Delta P}ed=lower segmentupper segmente_d = \dfrac{\text{lower segment}}{\text{upper segment}} (geometric)

5. Key Points

  • Elastic: e_d > 1; inelastic: e_d < 1.
  • Expenditure method of elasticity.
  • Giffen goods are exceptions.
  • Market demand = horizontal sum.

Remember: MU/P equal | IC & budget line | demand & elasticity

Microeconomics: Theory of Consumer Behaviour: questions and notes

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