EASY
12th CBSE
IMPORTANT
Earn 100

What is budget line?

Important Questions on Theory of Consumer Behaviour

MEDIUM
12th CBSE
IMPORTANT
Introductory Microeconomics>Chapter 2 - Theory of Consumer Behaviour>Q 3
Explain why the budget line is downward sloping.
HARD
12th CBSE
IMPORTANT
Introductory Microeconomics>Chapter 2 - Theory of Consumer Behaviour>Q 4
A consumer wants to consume two goods. The prices of the two goods are Rs4 and Rs5 respectively. The consumer’s income is Rs20.

Write down the equation of the budget line.

HARD
12th CBSE
IMPORTANT
Introductory Microeconomics>Chapter 2 - Theory of Consumer Behaviour>Q 5
A consumer wants to consume two goods. The prices of the two goods are Rs 4 and Rs 5 respectively. The consumer’s income is Rs 20.

How much quantity of good 1 can the consumer consume if she spends her entire income on that good?

MEDIUM
12th CBSE
IMPORTANT
Introductory Microeconomics>Chapter 2 - Theory of Consumer Behaviour>Q 6
A consumer wants to consume two goods. The prices of the two goods are Rs4 and Rs5 respectively. The consumer’s income is Rs20.

How much of good 2 can she consume if she spends her entire income on that good ?

HARD
12th CBSE
IMPORTANT
Introductory Microeconomics>Chapter 2 - Theory of Consumer Behaviour>Q 7
A consumer wants to consume two goods. The prices of the two goods are Rs4 and Rs5 respectively. The consumer’s income is Rs20.

What is the slope of the budget line ?

MEDIUM
12th CBSE
IMPORTANT
Introductory Microeconomics>Chapter 2 - Theory of Consumer Behaviour>Q 8
How does the budget line change if the consumer's income increases to Rs40 but the prices remain unchanged ?
MEDIUM
12th CBSE
IMPORTANT
Introductory Microeconomics>Chapter 2 - Theory of Consumer Behaviour>Q 9
How does the budget line change if the price of good 2 decreases by a rupee but the price of good 1 and the consumer's income remain unchanged ?
MEDIUM
12th CBSE
IMPORTANT
Introductory Microeconomics>Chapter 2 - Theory of Consumer Behaviour>Q 10
What happens to the budget set if both the prices as well as the income double ?