Microeconomics: Theory of Consumer Behaviour · Class 11 · CBSE · Commerce Economics
A consumer has an income of ₹120. The prices of goods X and Y are ₹20 and ₹10 per unit respectively. Which equation represents the consumer's budget…
Practice question from Microeconomics: Theory of Consumer Behaviour (Class 11 · CBSE · Commerce Economics), with the correct answer and a step-by-step solution.
medium · MCQ · Q-565D0C
A consumer has an income of ₹120. The prices of goods X and Y are ₹20 and ₹10 per unit respectively. Which equation represents the consumer's budget line?
- A.20X + 10Y = 120Correct answer
- B.10X + 20Y = 120
- C.20X + 10Y = 12
- D.X + Y = 120
Solution
The budget constraint is given by . Substituting the given values gives .
More from Microeconomics: Theory of Consumer Behaviour
- When marginal utility of a commodity is positive but continuously diminishing, total utility generally:
- For an interior consumer equilibrium under the indifference curve approach, which condition must hold, assuming the indifference curve is c…
- Explain how a fall in the price of a commodity affects a consumer's budget set, assuming income and the price of the other commodity remain…
- A consumer has a marginal utility of money of ₹2 per utils. If the marginal utility of a commodity is 10 utils and its price is ₹4, what do…
Practise more Economics
Sign up free for adaptive practice on this chapter, with instant feedback and hints on every question.
Start practising freeFree to start · No credit card needed