Assertion (A) Total utility will be maximum, when marginal utility to price of respective products are equal.<br>Reason (R) Deviation from this situation leads to reduction in maximum utility.

Which of the following are not the assumptions related to the theory of consumer behaviour as per the cardinal utility approach?
1. Rational consumer
2. Unlimited money income
3. Utility cardinally measurable
4. Diminishing marginal utility of money
5. Constant marginal utility of commodities
6. Maximisation of satisfaction
7. Utility is additive

A

1, 3, 5 and 7

B

2, 4 and 5

C

1, 3, 4 and 5

D

Both 6 and 7

For the following statement of Assertion (A) and Reasoning (R) select the correct answer:
Assertion (A): Price reduction normally leads to an increase in the demand for a commodity.
Reason (R): Price reduction leads to the entry of new buyers of the commodity in the market.

A

(A) is correct but (R) is not correct

B

(A) is not correct but (R) is correct

C

Both (A) and (R) are correct and offers a full explanation of (A)

D

Both (A) and (R) are correct but (R) does not offer a full explanation of (A)

From the following two statements of Assertion (A) and Reason (R), indicate the correct answer.
Assertion (A) From the marginal costing approach point of view, the marginal cost is compared with the purchase price.
Reason (R) If the marginal cost is less than the purchase price it should be purchased rather than manufactured.

A

Both (A) and (R) are correct

B

(A) is correct, but (R) is not correct

C

(A) is not correct, but (R) is correct

D

Both (A) and (R) are incorrect

From the following two statements of Assertion (A) and Reason (R). Indicate the correct option.
Assertion (A) From the marginal costing approach point of view, the marginal cost is compared with the purchase price.
Reason (R) If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

A

Both (A) and (R) are correct

B

(A) is correct, but (R) is not correct

C

(A) is not correct, but (R) is correct

D

Both (A) and (R) are incorrect

When labour is plotted on X-axis and capital is plotted on Y-axis and an isoquant is prepared, then which of the following statement(s) is/arefalse?
1. Marginal rate of technical substitution of labour for capital is equal to the slope of the iso-quant.
2. Marginal rate of technical substitution of labour for capital is equal to change in the units of capital divided by the change in the units of labour.
3. Marginal rate of technical substitution of labour for capital is the ratio of marginal productivity of capital to marginal productivity of labour.

A

Both 1 and 2

B

Only 3

C

Only 1

D

Only 2

Assertion (A): From the marginal costing approach point of view, the marginal cost is compared with the purchase price.
Reason (R): If the marginal cost is less than the purchase price, it should be purchased rather than manufactured.

A

Both (A) and (R) are correct

B

(A) is correct, but (R) is incorrect

C

(A) is incorrect, but (R) is correct

D

Both (A) and (R) are incorrect

Good 'Y' is the substitute for good 'X' if
1. A fall in the price of good X leads to the fall in the marginal utility of good Y.
2. A fall in the price of good X leads to the fall in the quantity purchased of good Y. Select the correct answer

A

Only 1

B

Only 2

C

Both 1 and 2

D

Neither 1 nor 2

Marginal cost is equal to marginal revenue, average cost is equal to average revenue, average revenue is equal to marginal revenue and average cost is equal to marginal cost. This is the condition of
1. long period equilibrium for a firm under monopoly
2. short period equilibrium for a firm under oligopoly
3. long period equilibrium
4. long period equilibrium for a firm under perfect competitions
Select the correct answer

A

Both 1 and 4

B

Both 3 and 4

C

Both 3 and 1

D

Only 1

The marginal cost is equal is to marginal revenue, the average cost is equal to average revenue, average revenue is equal to marginal revenue, and the average cost is equal to marginal cost. This is the condition of
1. Long-period equilibrium for a firm under monopoly.
2. Short-period equilibrium for a firm under oligopoly.
3. Long-period equilibrium
4. Long-period equilibrium for a firm under perfect competition.

A

1 and 4

B

3 and 4

C

1 and 3

D

Only 1

In perfect competition, when a firm is in short periods, for equilibrium, the following condition does apply
1. Marginal cost must equal marginal revenue.
2. Average cost must equal average revenue.
3. Marginal revenue must equal average revenue.
4. Marginal cost must equal average cost.

A

1, 2 and 3

B

1 and 3

C

2, 3 and 4

D

Only 3