{"id":42827,"date":"2024-04-15T21:20:41","date_gmt":"2024-04-15T21:20:41","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=42827"},"modified":"2024-04-15T21:20:41","modified_gmt":"2024-04-15T21:20:41","slug":"in-the-case-consumers-equilibrium-to-be-explained-through-an-ordinal-approach-when-there-are-two-commodities-with-their-prices-given-and-with-limited-income-of-the-consumer-the-following-information","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/in-the-case-consumers-equilibrium-to-be-explained-through-an-ordinal-approach-when-there-are-two-commodities-with-their-prices-given-and-with-limited-income-of-the-consumer-the-following-information\/","title":{"rendered":"In the case consumers equilibrium to be explained through an ordinal approach, when there are two commodities with their prices given and with limited income of the consumer, the following information is required: I. Price line\/budget line II. Indifference map III. Point of tangency between IC and budget line IV. Equality of the slopes of IC and budget line Arrange the information required in the correct sequence and choose the right option from those below"},"content":{"rendered":"

[amp_mcq option1=”II, IV, I, III” option2=”II, I, IV, III” option3=”I, IV, II, III” option4=”I, II, III, IV” correct=”option4″]<\/p>\n

The correct answer is D. I, II, III, IV.<\/p>\n

In the case of consumers equilibrium to be explained through an ordinal approach, when there are two commodities with their prices given and with limited income of the consumer, the following information is required:<\/p>\n

    \n
  1. Indifference map: An indifference map is a set of indifference curves that shows all the combinations of two goods that provide the consumer with the same level of satisfaction.<\/li>\n
  2. Price line\/budget line: A price line\/budget line is a line that shows all the combinations of two goods that the consumer can afford given their income and the prices of the two goods.<\/li>\n
  3. Point of tangency between IC and budget line: The point of tangency between an indifference curve and a budget line is the point at which the consumer is in equilibrium, i.e., the point at which the consumer is maximizing their satisfaction given their income and the prices of the two goods.<\/li>\n
  4. Equality of the slopes of IC and budget line: The slopes of the indifference curve and the budget line are equal at the point of tangency. This is because the consumer is indifferent between all the points on the indifference curve, and they are also indifferent between all the points on the budget line. Therefore, the consumer will choose the point on the indifference curve that is also on the budget line, i.e., the point of tangency.<\/li>\n<\/ol>\n

    Therefore, the correct sequence of the information required is D. I, II, III, IV.<\/p>\n","protected":false},"excerpt":{"rendered":"

    [amp_mcq option1=”II, IV, I, III” option2=”II, I, IV, III” option3=”I, IV, II, III” option4=”I, II, III, IV” correct=”option4″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-42827","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\nIn the case consumers equilibrium to be explained through an ordinal approach, when there are two commodities with their prices given and with limited income of the consumer, the following information is required: I. Price line\/budget line II. Indifference map III. Point of tangency between IC and budget line IV. Equality of the slopes of IC and budget line Arrange the information required in the correct sequence and choose the right option from those below<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/in-the-case-consumers-equilibrium-to-be-explained-through-an-ordinal-approach-when-there-are-two-commodities-with-their-prices-given-and-with-limited-income-of-the-consumer-the-following-information\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"In the case consumers equilibrium to be explained through an ordinal approach, when there are two commodities with their prices given and with limited income of the consumer, the following information is required: I. Price line\/budget line II. Indifference map III. 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