Theory of Consumer BehaviourClass 12 Introductory Microeconomics Assertion & Reason Questions

Assertion (A): Total Utility is at its maximum when Marginal Utility is zero.

Reason (R): Marginal Utility is the utility derived from the first unit of a commodity consumed.

Assertion (A): An indifference curve is typically convex to the origin.

Reason (R): The Law of Diminishing Marginal Rate of Substitution states that a consumer is willing to sacrifice less and less of one good to obtain an additional unit of another good.

Assertion (A): An increase in a consumer's income, with prices of goods remaining constant, causes a parallel outward shift in the budget line.

Reason (R): The slope of the budget line is determined by the ratio of the prices of the two goods.