Start learning →

CA Foundation Theory of Consumer Behaviour — practice questions — page 2

Explore 52 free Theory of Consumer Behaviour questions in CA Foundation Business Economics. Open each question or exercise to read its content, reference answers and available explanation.

Practise Theory of Consumer Behaviour with Quill →

Theory of Consumer Behaviour questions and exercises with answers

Showing questions 31–52 of 52.

A corner solution means the consumer buys what?Read the answer and worked solution →The locus of tangency points as income varies is called the what?Read the answer and worked solution →Taxes or quantity discounts can make a budget constraint what?Read the answer and worked solution →In the leisure-consumption model, the wage is the price of what?Read the answer and worked solution →An increase in income, prices constant, shifts the budget line how?Read the answer and worked solution →A good whose purchases fall as income rises is called what?Read the answer and worked solution →The income effect shows the change in demand caused by a change in what?Read the answer and worked solution →The price effect equals the sum of which two effects?Read the answer and worked solution →The substitution effect leaves the consumer on which indifference curve?Read the answer and worked solution →A price rise of good Y makes the budget line do what?Read the answer and worked solution →Consumer choice theory assumes consumers maximise what?Read the answer and worked solution →Marginal utility is the extra utility from what?Read the answer and worked solution →With each extra unit consumed, marginal utility typically does what?Read the answer and worked solution →Which function is the best known utility function in the theory?Read the answer and worked solution →Traditionally, rational behaviour of a consumer means what?Read the answer and worked solution →Behavioural economists say consumers often use shortcuts called what?Read the answer and worked solution →An impulsive purchase is an example of what, per behavioural critics?Read the answer and worked solution →Reluctance to spend on luxuries beyond a set limit reflects what?Read the answer and worked solution →The indifference curve idea in biology models what?Read the answer and worked solution →Consumer theory derives demand curves using budget lines and what?Read the answer and worked solution →The law of demand holds even when the consumer is compensated for a price rise. This is the what?Read the answer and worked solution →Which assumption makes curves smooth and convex to the origin?Read the answer and worked solution →

Worked practice questions

A corner solution means the consumer buys what?

  1. Equal amounts of both
  2. Nothing at all
  3. Only one of the goods
  4. Only inferior goods
Show answer and solution

Correct answer: C. Only one of the goods

When the tangency lies outside the feasible set, the optimum has the consumer consuming only one good.

Open this question →

The locus of tangency points as income varies is called the what?

  1. Offer line
  2. Demand curve
  3. Budget frontier
  4. Expansion path
Show answer and solution

Correct answer: D. Expansion path

Tracing the interior tangency points as income changes gives the expansion path.

Open this question →

Taxes or quantity discounts can make a budget constraint what?

  1. Vertical
  2. Kinked
  3. Circular
  4. Disappear
Show answer and solution

Correct answer: B. Kinked

Taxes, subsidies, discounts and rationing change prices with quantity, producing kinked or non-linear budget lines.

Open this question →

How to practise

  1. Choose a Theory of Consumer Behaviour question and try to work out your answer.
  2. Open the question to check the correct answer and read its worked solution.
  3. Continue in the app for bite-sized lessons, explanations and review with Quill. You can start without creating an account.

Put it into practice

Continue with Theory of Consumer Behaviour practice for CA Foundation. Read explanations as you go. No signup form needed to start.

Practise Theory of Consumer Behaviour →

More Business Economics topics

EconomicsPrice-Output Determination under Different Market FormsPublic FinanceSupplyLaw of DemandInternational TradeBasic Problems of an Economy and Role of Price MechanismProduction And Cost