All India Management Association (AIMA) 2007 M.B.A Marketing Management Business Economics – I - Question Paper
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17.Which of the subsequent statements is false?
(a) Indifference curve defines all the possible combinations of 2 goods which provide
equal satisfaction to the consumer
(b) Total utility is the sum of marginal utilities of all units of a good consumed
(c) When price of a product increases, demand for its complement increases
(d) Utility is a psychological concept and therefore cannot be precisely measured
(e) Consumer surplus of a good and its economic value are various. (1 mark)
18.The indifference curves are convex to the origin. This is due to
(a) Diminishing marginal rate of substitution
(b) Increasing marginal rate of substitution
(c) Constant marginal rate of substitution
(d) Increasing marginal rate of tech. substitution
(e) Constant marginal rate of tech. substitution. (1 mark)
19.Assume that the consumer is in equilibrium consuming commodities X and Y. If marginal utility of
commodity X is 280 utils, price of the commodity X is Rs.20, and the price of commodity Y is Rs.10,
the marginal utility of Y is
(a) 28 utils
(b) 93 utils
(c) 140 utils
(d) 280 utils
(e) 310 utils. (2marks)
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20.The utility function of a consumer is, U = 12X1.5. If the price of the good is Rs.108 per unit, the
consumer would consume
(a) nine units
(b) 18 units
(c) 36 units
(d) 108 units
(e) 144 units. (2marks)
21.Mr. Rammohan consumes 2 goods, A and B. At equilibrium, marginal utility of A is 250 utils and the
price of A is Rs. 50. If the marginal utility of good B at equilibrium is 350 utils, the price of B is
(a) Rs.45
(b) Rs.50
(c) Rs.55
(d) Rs.60
(e) Rs.70. (2marks)
22.The total utility function of Mr. Rama Rao is provided as follows:
U = 40XY
where, X and Y represent the volumes of 2 goods consumed.The price of goods X and Y are Rs.2
and Rs.4 respectively. If Mr. Rama Rao attains equilibrium by consuming 40 units of commodity X, the
number of units of good Y consumed by Mr. Rama Rao is
(a) 10 units
(b) 20 units
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