2 C 33371
7. The price elasticity calculated over a range of prices :
(a) Point elasticity. (b) Cross elasticity.
(c) Arcelasticity. (d) Income elasticity.
8. Expenditure that is made and cannot be recovered :
(a) Fixed cost. (b) Variable cost.
(c) Sunk cost. (d) Accounting cost.
9. At the optimal consumption bundle :
(a) The marginal utility of all goods consumed is equal.
(b) The marginal utility per rupee spent is equal for all goods consumed.
(c) The price of all goods consumed is equal.
(d) None of the above.
10. Marginal utility refers to: 4
(a) The additional product produced as the firm adds one additional unit of an input.

(b) The additional utility that a consumer derives from consuming one additional unit of a
good.

(c) The total utility derived by consuming the good.
(d) All of the above. |
11. If goods X and Y are substitutes, with an increase in the price of Y, the demand for X will :
(a) Increase. (b) Decrease.
(c) No change. (d) First increase and then decrease.
12. When total utility is maximum ?
(a) Marginal utility is zero.
(b) An additional unit of consumption will decrease total utility.
(c) An additional unit of consumption will increase total utility.
(d) Marginal utility is constant.

(12 x 4% = 6 marks)