Consumer Behaviour and Demand - Microeconomics - Economics Previous Year Questions

1

2021 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2021

A firm finds that for the product that it produces, its (own) price elasticity of demand is 4. Currently, the firm is selling 2000 units per month at ₹ 5 per unit. If it wishes to increase its sales by 10%, it must

A

lower its price by 4%

B

lower its price by 2%

C

lower its price by 2.5%

D

increase its price by 2%

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2

2021 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2021

Trisha’s consumption preference on biryani (\(x\)) and pudding (\(y\)) is given by the utility function \(U(x, y) = x + 4y\). The price per unit of biryani is ₹2 and the price per unit of pudding is ₹3. Trisha’s total income is ₹120. However, she faces an extra quantity constraint as she is not allowed to consume biryani more than 60 units and pudding more than 30 units. The optimum quantity of biryani and pudding consumed by Trisha is

A

\((x^*, y^*) = (30, 20)\)

B

\((x^*, y^*) = (15, 30)\)

C

\((x^*, y^*) = (30, 15)\)

D

\((x^*, y^*) = (60, 0)\)

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3

2022 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2022

There are two regions in a country. The demand for chocolates in region 1 is given by
\( Q_1(P) = 100 - P \)
and the demand for chocolates in region 2 is given by
\( Q_2(P) = 200 - P \)
where \( Q_1(P) \) and \( Q_2(P) \) denote the demand for chocolates in region 1 and 2 respectively at a price \( P \). There is only one seller who is licensed to sell chocolates in the country. Suppose the seller sets a price of \( P = 125 \). The total demand for chocolates in the country at this price is

A

50

B

75

C

100

D

125

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4

2022 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2022

Tom and Jerry both arrive at a petrol pump. Without worrying about price, Tom says, “I want 10 liters of petrol.” Also, without worrying about price, Jerry says, “I want petrol worth 1000 rupees.” The own price elasticities of demand for Tom (denoted by \(\varepsilon_T\)) and Jerry (denoted by \(\varepsilon_J\)) are:

A

\(\varepsilon_T = 0, \varepsilon_J = -\infty\)

B

\(\varepsilon_T = 0, \varepsilon_J = -1\)

C

\(\varepsilon_T = -\infty, \varepsilon_J = 0\)

D

\(\varepsilon_T = -1, \varepsilon_J = 0\)

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5

2022 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2022

Mr. Sharma’s consumption preference for tea (denoted by \(x\)) and sugar (denoted by \(y\)) is given by the utility function
\(U(x, y) = min\{x, 2y\}\)
The price per unit of tea is 10 and the price per unit of sugar is 10. Mr. Sharma’s total income is 900.
The optimum quantity of tea purchased by Mr. Sharma equals ______ (in integer).

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6

2023 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2023

An individual is endowed with income of Rs. 142 and has the utility function \( U(x_1, x_2) = x_2(x_1 + 1) \), where \( x_1 \geq 0, x_2 \geq 0 \). The unit price of \( x_1 \) is Rs. 2 and the unit price of \( x_2 \) is Rs. 3. The utility maximizing bundle is

A

\(x_1 = 35, x_2 = 20 \)

B

\(x_1 = 30, x_2 = 24 \)

C

\(x_1 = 35, x_2 = 24 \)

D

\(x_1 = 30, x_2 = 20 \)

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7

2023 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2023

Suppose the own price elasticity of demand and income elasticity of demand are given by \( e_p \) and \( e_I \), respectively. The subscript \( p \) represents own price of a good and the subscript \( I \) represents the income of the consumer. Identify the correct statement(s) from the following.

A

If \(1 < e_p < \infty \), the demand is price inelastic.

B

Luxury goods are more price inelastic and the necessities are price elastic.

C

Luxury goods have \(e_I > 1 \).

D

If \(0 < e_p < 1 \), the demand is price elastic.

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8

2023 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2023

The demand and supply functions for a commodity are given by: \[ D(p) = 10 - 2p \] and \[ S(p) = -2 + p \] where \( D(p) \) and \( S(p) \) are the quantity demanded and supplied, respectively, and \( p \) (in USD) is the unit price of the good.
If the government sets a price ceiling of USD 3 per unit, then the increase in consumer surplus (in USD) is ______ (round off to two decimal places).

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9

2024 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2024

Consider a Cobb-Douglas utility function given as \(U(H) = (24 - H)^{1-a} (wH)^a\), where \(H\) is the number of hours spent working per day, and \(w\) is the wage rate per hour. If \(a = \frac{1}{2}\), then the corresponding labour supply (in hours) is __________ (in integer).

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10

2024 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2024

A decrease in the income tax rate has a ______ effect on the labour supply if the ______ effect dominates.

A

negative; income

B

positive; substitution

C

positive; income

D

negative; substitution

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11

2025 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2025

The demand function is given as \(\log Q = \log A + 0.5 \log P\), where \(Q\) is quantity, \(P\) is the unit price of the good and \(A\) is a positive real number. The own price elasticity of demand is

A

Perfectly elastic

B

Perfectly inelastic

C

Elastic

D

Inelastic

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12

2025 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences-Economics (XH-C1) 2025

A Constant Elasticity of Substitution (CES) utility function is given as: \( U_{CES}(z_1, z_2) = \frac{1}{\delta}(z_1^\delta + z_2^\delta) \) where \( z_1 \) and \( z_2 \) are two goods, and \( \delta \leq 1, \delta \neq 0 \). A Quasi-linear (QL) utility function is given as: \( U_{QL}(z_1, z_2) = 2z_1 + \log z_2 \) where \( z_1 \) and \( z_2 \) are two goods. Which of the following statements is/are NOT CORRECT?

A

The CES utility function is homothetic but the QL utility function is non-homothetic.

B

For \(\delta = 1 \), the CES utility function is not strictly convex.

C

The Marginal Rate of Substitution (\(MRS_{z_1z_2} \)) for the CES utility function and the QL utility function are dependent on both \(z_1 \) and \(z_2 \).

D

If \(z_1 = z_2 \), the Marginal Rate of Substitution (\(MRS_{z_1z_2} \)) is 2 for both the CES and the QL utility functions.

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13

2026 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences - Economics (XH-C1) 2026

Madhu’s utility function is given by \( U = \max(2C, 3F) \), where \( C \) represents the amount of cloth and \( F \) represents the amount of food. Her preferences DO NOT satisfy which one of the following axioms?

A

Completeness

B

Continuity

C

Convexity

D

Transitivity

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14

2026 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences - Economics (XH-C1) 2026

You and three of your friends go to a restaurant for dinner. All four of you agree to divide the total bill equally amongst yourselves. One of your friends orders a dish worth INR 400. The marginal cost for ordering the dish for each one of you in INR is ________ (in integer)

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15

2026 · Economics · Microeconomics · Consumer Behaviour and Demand

Humanities & Social Sciences - Economics (XH-C1) 2026

The market for torch is perfectly competitive. The market demand function for torch is given by X^d = min(400 - p,0), p ≥ 0, where p is the price of a torch. The market supply for the same good is X^s = max(0, \(\frac{p}{2} - \frac{80}{7}\)), p ≥ 0. If a specific tax of 40 is imposed on the purchase of each unit of torch, the corresponding decrease in the consumer surplus is _____ (rounded off to one decimal place)

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