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Indifference curve approach (ordinal approach) is superior to utility approach (cardinal approach) because:

A. In ordinal approach we can separate the income effect from the substitution effect of a price change

B. In ordinal approach we can study the consumer behavior more closely

C. In ordinal approach the consumer is assumed more rational

D. In ordinal approach the consumer has more income

Correct Answer : A.


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  1. If a straight line supply curve passes through the point of origin O, the elasticity of supply is:
  2. Competitors in monopolistic competition have full control over:
  3. The concept of industry in monopolistic competition has been replaced by:
  4. When in a market, the number of buyers is very large and the number of sellers is very small, it is…
  5. Which of the following has more elastic demand curve?
  6. According to Chamberline, in monopolistic competition, differentiation is determined by:
  7. Utility is:
  8. The games which played by players again and again are called:
  9. If the increase in demand is more than the increase in supply, the price will:
  10. The firm is said to be in equilibrium when the difference between revenue and cost is:
  11. Normally when price per unit of time falls:
  12. The marshallian demand curve includes:
  13. The number of sellers in oligopoly are:
  14. In which case the elasticity shown by the different points of a curve is the same?
  15. On the total utility curve the economically relevant range is the portion over which:
  16. Economic problems arise because:
  17. Excess capacity is not found under:
  18. Demand of a commodity is elastic when:
  19. According to classical approach, utility can be:
  20. At high prices, demand is likely to be:
  21. A monopolist is:
  22. The main contribution of David Ricardo is in the field of:
  23. In collusive olligopoly, the firms may make:
  24. In dominant price leadership model, the small firms are like:
  25. The Tit for Tat strategy means cooperation by the 2nd firm if:
  26. The combination of labor and capital where the cost of a given output is minimized is known as:
  27. For the equilibrium of the firm and the industry in the short period in a competitive market, the condition…
  28. If the commodity is normal then Income Effect (I.E) is:
  29. At a point where a straight line demand curve meets the price axis (Y-axis), the elasticity of demand…
  30. Least cost combination of two factor inputs is achieved at a point where: