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11 . In the case of an inferior good, the income effect
 A. Is equal to the substitution effect B. Reinforces the substitution effect C. Partially offsets the substitution effect D. More than offsets the substitution effect

12 . Law of diminishing marginal utility is based on the assumption that
 A. Tastes change over time B. Consumption is continuous C. Different units of goods consumed are homogeneous D. None of these

13 . Other things remaining the same, when a consumer's income increases, his equilibrium point moves to
 A. A lower indifference curve B. A higher indifference curve C. Remains unchanged on the same indifference curve D. To the left-hand side on the same indifference curve

14 . Income elasticity is computed by
 A. ei = (Y2 - Y1 ) / e1 B. ei = (Y1 - Y2 ) / P1 C. ei = (Q2 - Q1 ) / P1 ​ D. ei = ( (Q2 - Q1 ) / Q1 ​) / ( (Y2 - Y1 ) / Y1 ​)

15 . Price elasticity is computed by
 A. ep = (((Q2- Q1) / Q1 ) / P1) X 100 B. ep = ((Q2- Q1) / Q1 ) / ((P2 - P1) / P1) C. ep = (((Q2- Q1) / Q1 ) / Product) X 100 D. ep =( (P1 - P2) / Q1 ) X ((P1+P2) / Q2)

### Verbal Ability

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