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

1, 3, 5 and 7

2, 4 and 5

1, 3, 4 and 5

Both 6 and 7

Cardinal utility analysis of consumer's behaviour is based on which combination of the following assumptions:
I. Utility is measurable is terms of cardinal numbers
II. Constancy of the marginal utility of money
III. Utilities of different goods are interdependent
IV. Gossen's first law of consumption
Choose the correct answer

Only I and II

Only I, II and IV

Only II, III and IV

Only III and IV

On which of the following assumptions, the theory of consumer behaviour of cardinal utility approach is NOT based?

Consumer is rational

Limited money income of the consumer

Maximization of total satisfaction

Diminishing marginal utility of money

Which one of the following assumptions is not related to consumer behaviour based on the cardinal utility approach?

Rationality

Diminishing marginal utility of money

Utility cardinally measurable

Maximisation of satisfaction with limited money income

Identify the type of tariff the consumer is charged Rs 4 per unit if the consumer does not exceed 50 KWh, Rs 3.50 per unit if the consumer does not exceed 50 KWh but less than 200 kilowatt hour, and Rs 3 per KWh if consumer exceeds 200 kilowatt hour.

Flat demand tariff

Simple tariff

Flat rate tariff

Step rate tariff

The ordinal utility analys is of consumer behaviour is considered superior to the cardinal utility analysis mainly due to the

Assumption of the rationality of consumer behaviour

Possibility of the derivation of consumer demand

Bifurcation of price effects into income and substitution effects

Consideration of the available limited resources for satisfying consumer demand

Ordinal utility analysis of the consumer's behaviour is considered superior to the cardinal utility analysis mainly due to

assumption of the rationality of the consumer's behaviour

possibility of the derivation of the consumer's demand

bifurcation of price effects into income and substitution effects

consideration of the available limited resources for satisfying consumer's demand

According to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to

improve

diminish

remain constant

first diminish and then improve

Statement I The objective of finance function is wealth maximisation.
Statement II The objective of finance function is profit maximisation.

Both statements are correct

Both statements are incorrect

Statement I is correct, Statement II is incorrect

Statement I is incorrect, Statement II is correct

Baumol has suggested as an alternative objective for profit maximisation, the maximisation of

sales

profit

income

None of these

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.

Both 1 and 2

Only 3

Only 1

Only 2