Substitution Effect 1591 to 1595 Informative

This Quiz is somewhere relates to Slutsky and Hicksian Substitution Effect and Price Consumption Curve.

Substitution Effect MCQs

  1. Which of the following statements is false with regard to the Slutsky substitution effect?
    • It is larger than the Hicksian substitution effect
    • It leads to a demand curve which is more elastic than the Hicksian demand curve
    • Consumption is on a different indifference curve than before the price change
    • It is given by a movement along the same indifference curve
  2. Slutsky keeps real income constant when the price of a commodity falls by
    • Keeping the consumer on the same indifference curve
    • Pushing the consumer to a lower indifference curve
    • Allowing the consumer to purchase the same basket of goods as before the price change
    • Allowing the consumer to purchase more of both commodities than before the price change.
  3. When real income rather than money income is kept constant in drawing a consumer’s demand curve for a commodity, the demand curve is negatively sloped
    • Always
    • Never
    • Sometimes
    • Often
  4. The substitution effect for a fall in the price of a commodity (ceteris paribus) is given by
    • A movement up a given indifference curve
    • A movement from a higher to a lower indifference curve
    • A movement down a given indifference curve
    • Any of the above
  5. The price-consumption curve for a straight-line demand curve extended to both axes
    • Falls throughout
    • Rises throughout
    • Falls and then rises
    • Rises and then falls
Substitution Effect MCQs

Substitution Effect MCQs with Answers

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Economics 1591-1595

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1 / 5

Which of the following statements is false with regard to the Slutsky substitution effect?

2 / 5

Slutsky keeps real income constant when the price of a commodity falls by

3 / 5

When real income rather than money income is kept constant in drawing a consumer’s demand curve for a commodity, the demand curve is negatively sloped

4 / 5

The substitution effect for a fall in the price of a commodity (ceteris paribus) is given by

5 / 5

The price-consumption curve for a straight-line demand curve extended to both axes

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