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Questions › UGC-NET › UGC-NET 2025 › Q28
2 marksMicroeconomics › Budget constraint and consumer equilibrium › Utility maximisation and the interior optimumModerateabout 1 min

UGC-NET 2025 Question 28: Budget constraint and consumer equilibrium

Which of the following are true regarding the outcome of a consumer's optimization process?

A. The marginal utility per rupee spent on each good is the same.

B. The marginal rate of substitution between goods is equal to the ratio of the prices between the goods.

C. The consumer reaches the highest indifference curve in the indifference map.

D. The consumer's indifference curve is tangent to his/her budget line.

E. From a utility point of view, the consumer is indifferent between any two points on his/her budget line.

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Answer and worked solution

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Budget constraint and consumer equilibrium has come up 99 times in 7 exams since 2004.

What this question tests

This question is on Utility maximisation and the interior optimum, part of Budget constraint and consumer equilibrium in Microeconomics.

Choosing the best affordable bundle where an indifference curve is tangent to the budget line, including Cobb-Douglas demand.

TestStop has 20 past-paper questions on this subtopic.

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