Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:
Which of the following is NOT an assumption of consumer equilibrium in "Cardinal utility analysis"?
Options:
rational consumer
cardinal utility
independent utility
marginal utility of money is variable
Correct Answer:
marginal utility of money is variable
Explanation:
The major assumptions of consumer equilibrium includes that the consumer is rational and focus on maximising his utility. Apart, from this it is assumed that the utility can be measured in the form of numbers i.e. 1 mango gives 5 utils of satisfaction. It is also assumed that all the commodities offer independent utility and they are not dependent on one another or get influenced. Marginal utility of money is held constant in consumer equilibrium.