Which of the following statements are correct?
(A) With perfectly divisible goods, x1 and x2 must be whole numbers.
(B) The quantities x1 and x2 in a bundle can be positive or zero.
(C) Milk is a divisible good, as one-fourth of a litre of milk can be bought.
(D) One-fourth of a banana can be bought, so bananas are divisible goods.
(E) Rice is a divisible good, as half a kilogram of rice can be bought.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (B), (C) and (E) only
A good is divisible if it can be bought in parts, not only in whole units. Then x1 and x2 can be any numbers from 0 upwards.
(A) With perfectly divisible goods, x1 and x2 must be whole numbers. — Incorrect. With divisible goods they can be any numbers greater than or equal to 0, fractions included.
(B) The quantities x1 and x2 in a bundle can be positive or zero. — Correct. A bundle may contain none of one good.
(C) Milk is a divisible good, as one-fourth of a litre of milk can be bought. — Correct. Milk can be bought in part-litres.
(D) One-fourth of a banana can be bought, so bananas are divisible goods. — Incorrect. One cannot buy one-fourth of a banana.
(E) Rice is a divisible good, as half a kilogram of rice can be bought. — Correct. Rice can be bought in part-kilograms.
NCERT (2026-27): “Preliminary Notations and Assumptions … In general, we shall use the variable x1 to denote the quantity of bananas and x2 to denote the quantity of mangoes. x1 and x2 can be positive or zero. …” “2.2.1 Budget Set and Budget Line If both the goods are perfectly divisible6, the consumer’s budget set would consist of all bundles (x1, x2) such that x1 and x2 are any numbers greater than or equal to 0 and p1x1 + p2x2 ≤ M. …” Footnote 6: “The goods considered in Example 2.1 were not divisible and were available only in integer units. There are many goods which are divisible in the sense that they are available in non-integer units also. It is not possible to buy half an orange or one-fourth of a banana, but it is certainly possible to buy half a kilogram of rice or one-fourth of a litre of milk.” |