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Chapter 2 – Theory of Consumer Behaviour
1.
Ans: Based on their price range, a budget set is a collection of two or more items that a consumer desires and can afford. A budget set is also known as an opportunity set.
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Ans: If a buyer knows how much money they have and how much both goods cost on the market, a budget line shows the different ways they can buy two goods that are both affordable.
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Ans: A budget line is a visual depiction of the limitations a customer faces while purchasing multiple items within a certain budget. Any time prices, tastes, or income change, a budget line will also change. An alternative name for it is a consumption possibility line. In this case, it is assumed that the customer purchases the bundle of products with all of their revenue.
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Ans: If the price of good 2 lowers, the consumer will be able to consume more of it. As a result, there will be an upward movement in the vertical axis.
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Ans: Even if both prices and income double, the budget will remain the same.
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(ii) The coordinates on line AB cost the same as the consumer’s income. Bundles are as follows:
(0,4) (1,3) (2,2) (3,1) (4,0)
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Ans: The idea that a logical customer will always choose “more” of a certain product over “less” is known as monotonic preference. This implies that packages that offer larger quantities of things will always result in happier customers.
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Ans: No, he/she cannot be indifferent between these two bundles since bundle I contains a greater quantity of both goods compared to bundle II. They will choose bundle I instead of bundle II because it includes 10 units of good 1 and 8 units of good 2, whereas bundle II has 8 units of good 1 and 6 units of good 2.
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Ans: If the consumer’s preferences are monotonic, then the bundles can be ranked as:
Rank 1 – (10, 10)
Rank 2 – (10, 9)
Rank 3 – (9, 9)
Consumers that are monotonous will always choose bundles (10, 10).
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Ans: My friend exhibits indifference towards the bundles (5, 6) and (6, 6). This indicates that their preferences are not monotonic. If an individual is indifferent between both bundles, it indicates that they derive equal satisfaction from each and assign them the same rank. The second bundle contains a greater quantity of both goods. Therefore, based on the monotonicity assumption, the individual must exhibit a preference for the second bundle over the first.
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| P | D1 | D2 | Market Demand = D = d1 + d2 |
| 1 | 9 | 24 | 9 + 24 = 33 |
| 2 | 8 | 20 | 8 + 20 = 28 |
| 3 | 7 | 18 | 7 + 18 = 25 |
| 4 | 6 | 16 | 6 + 16 = 22 |
| 5 | 5 | 14 | 4 + 12 = 16 |
| 6 | 4 | 12 | 4 + 12 = 16 |
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Ans: An item is considered normal if consumer demand rises in tandem with rising incomes or salaries. Let’s take a fruit like an apple as an example. As the income of consumers rises, so does the demand for apples.
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Ans: As a consumer’s income rises, desire for inferior goods falls. For instance, think about things like cheap smokes, cheap furniture, and cheap fast food. Even though they cost more, there are always better options than these ones. In other words, when people can buy better goods, they don’t need as many of them.
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Ans: Substitutes are commodities within the same category that can be utilized interchangeably to a certain degree. For instance, let us examine the commodities tea and coffee. Both goods belong to the same category of hot beverages, satisfy comparable needs, and are similarly priced. Consequently, a consumer will transition to coffee if the price of tea escalates and vice versa.
20.
Ans: Complements are commodities that are frequently consumed together and compliment one another. Examples include tea and sugar, as well as printers and cartridges. The pricing of complementary commodities influence each other’s demand. For example, if the price of sugar rises, the demand for tea is expected to fall dramatically.
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Ans: When the price of a good changes, how much does the desire for that good change? This is called price elasticity of demand. It can be calculated by dividing the change in a good’s price by the change in demand for that good.
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Related Study Resources of Chapter 2 – Theory of
Consumer Behaviour
Students can use the links below to get extra study materials for Class 12 Economics Chapter 2: Theory of
Consumer Behaviour.
| Sl No. | Related Links |
|---|---|
| 1 | Class 12 Economics Chapter 2 Theory of Consumer Behaviour- Important Questions |
| 2 | Class 12 Economics Chapter 2 NCERT Textbook |
Download Theory of Consumer Behaviour NCERT Solutions PDF
You can download the PDF from the link below for offline study
Class 12 Theory of Consumer Behaviour Overview
Chapter 2: Theory of Consumer Behavior explains in a clear way how people make decisions, which is at the basis of economics. This chapter talks about things like budget lines, utility, indifference curves, and what has to happen for a consumer to be in equilibrium. Our Theory of Consumer Behavior NCERT Solutions make these ideas easier to understand by giving you real-life examples of how they work in everyday buying decisions. These solutions walk you through each stage, from determining how to spend your pocket money to looking at how price changes effect consumption.
A lot of students have trouble understanding graphs like indifference curves or budget limitations, and they also have trouble with utility-based math problems. That’s why our Theory of Consumer Behavior NCERT Solutions have straightforward, step-by-step ways to solve problems, diagrams to help explain things, and real-life examples. We also talk about typical test mistakes, such mixing up total utility and marginal utility, and give you ideas on how to avoid them. This will help you do better on both theory and math questions.
The 2025 NCERT syllabus changes make this chapter focus more on real-world examples, such as how shifting prices affect budgets and how to read the PPC curve in relation to customer preferences. We got rid of unnecessary repeating derivations, which opened up space for more application-oriented inquiries. Our solutions take these changes into account and show you every new example, so you may study in the most up-to-date way.
To sum up, these Theory of Consumer Behaviour NCERT Solutions not only help you understand the ideas better, they also teach you how to use them in tests and real life. These solutions help you think like an economist, present answers rationally, and stay confident under exam pressure, whether you’re reviewing for board exams, CUET, or improving your economic thinking.
FAQ Section
It describes how people make choices, which is the basis for many other economics issues.
By using labeled graphics and samples of real-life purchases from our solutions.
Total utility is the amount of happiness you feel generally, and marginal utility is the amount of happiness you feel from adding one more unit.
They show how pricing and income affect what a person can buy.
They show you how to do things step by step and provide you recommendations on how to avoid making typical blunders when doing math.