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CBSE · Class 12 · Social Science

Theory of Consumer Behaviour

Standard difficulty · 20 questions · 40 marks · Time: 37 minutes

Name: Date: Score: ____ / 40

Write full answers in Sections B and C. Answers are on the last page — try every question first!

Section A — Choose the correct answer8 × 1 = 8 marks
1.
The change in total utility from consuming one more unit is:
  1. average utility
  2. opportunity cost
  3. total utility
  4. marginal utility
2.
What happens to the demand for a good if income rises and the good is normal?
  1. the demand curve shifts right
  2. the supply curve shifts instead
  3. the demand curve becomes vertical
  4. a movement up along the demand curve
3.
Which pair of goods are complements?
  1. pens and pencils
  2. bus rides and train rides
  3. tea and coffee
  4. bread and butter
4.
The total utility from 1, 2, 3, 4, 5 and 6 samosas is 36, 64, 86, 104, 114, 118. What is the marginal utility of samosas number 5?
  1. 18 utils
  2. 114 utils
  3. 22.8 utils
  4. 10 utils
5.
A consumer has ₹440 to spend on two goods priced ₹2 and ₹20. What is the most units of good 2 she can buy?
  1. 11 units
  2. 22 units
  3. 220 units
  4. 44 units
6.
When the price of socks rises from ₹100 to ₹125, the quantity demanded falls from 2,000 to 1,250. What is the price elasticity of demand?
  1. 1.5
  2. 0.67
  3. 3
  4. 0.75
7.
The demand for a good is q = 102 − 3p. What is the price elasticity of demand at p = 24?
  1. 0.42
  2. 0.71
  3. 2.4
  4. 2.9
8.
At the consumer’s optimum, with prices ₹12 for good 1 and ₹10 for good 2, what is the marginal rate of substitution (units of good 2 given up per unit of good 1)?
  1. 1.2
  2. 22
  3. 0.83
  4. 120
Section B — Short answer8 × 2 = 16 marks
9.
State the law of diminishing marginal utility.
10.
Substitutes or complements? (a) tea and coffee (b) butter and margarine
11.
Explain each term: (a) indifference curve (b) budget line
12.
The marginal utility of successive bananas is 16, 14, 6, −2, −6, −14. Find the total utility after each one. When is total utility greatest?
13.
Prices are ₹10 and ₹5, and income is ₹550. Write the budget line. Is the bundle (46, 70) affordable?
14.
The price of soap falls from ₹40 to ₹20 and the quantity demanded changes from 1,000 to 1,600. Find the elasticity of demand and the change in total expenditure.
15.
Two consumers’ demands are q1 = 45 − 4p and q2 = 32 − 3p. Write the market demand and find it at p = 5.
16.
What happens to the demand curve for a good if (a) the price of the good itself falls (b) the price of the good itself rises?
Section C — Longer answers4 × 4 = 16 marks
17.
Explain the consumer’s optimum with indifference curves and a budget line.
18.
Match each with its meaning: (a) budget line (b) inferior good (c) normal good. Choose from: bundles costing exactly the whole income; demand rises when income rises; demand falls when income rises.
19.
The demand curve is q = 288 − 8p. (a) Find the elasticity at p = 2 and at p = 28. (b) At what price is demand unitary elastic? (c) Why does elasticity differ along a straight line?
20.
A shop finds that when the price of milk falls by 10% (from ₹40), sales rise from 1,600 to 1,760. (a) Find the elasticity of demand. (b) Is demand elastic, inelastic or unitary? (c) What happens to the money spent on milk?
AmbifulWorksheets
Practice that never repeats
CBSE · Class 12 · Social Science

Answer key

Theory of Consumer Behaviour · AW-12SS-CBH-2026-V1 · For parents — fold back or tear off before handing the sheet to your child.

QAnswerWorking
1(d) marginal utility—
2(a) the demand curve shifts right—
3(d) bread and butter—
4(d) 10 utils114 − 104
5(b) 22 units440 ÷ 20
6(a) 1.537.5% ÷ 25%
7(c) 2.4e = 3 × 24 ÷ (102 − 72) = 72 ÷ 30
8(a) 1.2MRS = p1/p2 = 12/10
9As more units of a good are consumed, the utility from each extra unit keeps falling.—
10(a) substitutes (b) substitutes—
11(a) bundles giving the same satisfaction (b) bundles costing exactly the whole income—
1216, 30, 36, 34, 28, 14; greatest (36) at 3 bananasTU = sum of MUs so far; TU is greatest where MU last stays positive (or is zero)
1310x1 + 5x2 = 550; it costs ₹810, so it is outside the budget set (not affordable)10 × 46 + 5 × 70 = 810
14e = 1.2 (elastic); expenditure goes from ₹40,000 to ₹32,00060% ÷ 50%; 40 × 1,000 and 20 × 1,600
15q = 77 − 7p; at p = 5, q = 42(45 − 20) + (32 − 15)
16(a) a movement down along the demand curve (b) a movement up along the demand curve—
17She picks the bundle on the budget line on the highest indifference curve she can reach, where the budget line is tangent to it, so MRS equals the price ratio p1/p2.—
18(a) bundles costing exactly the whole income (b) demand falls when income rises (c) demand rises when income rises—
19(a) 0.06 and 3.5 (b) p = 18 (the midpoint) (c) The slope is fixed but p/q changes along the line.e = 8p ÷ (288 − 8p); e = 1 when 8p = 288 − 8p
20(a) 1 (b) unitary elastic (c) from ₹64,000 to ₹63,360: it falls10% ÷ 10%