Which are the affecting factor of consumer behaviour Mcq?

Try the multiple choice questions below to test your knowledge of this chapter. Once you have completed the test, click on 'Submit Answers for Grading' to get your results.

This activity contains 6 questions.

According to research, there are four factors that influence consumer buyer behavior:

The psychological factors influencing consumer behavior are;

Which of the following statements is not true?

The consumers' five steps of adopting a new product refer to which of the following?

Habitual buying behavior occurs under conditions of low-consumer involvement and little significant brand difference.

Brand ambassadors spreading the word about their products are an example of; Buzz marketing.

Cardinal utility analysis is the oldest theory of demand which provides an explanation of consumer’s demand for a product and derives the law of demand which establishes an inverse relationship between price and quantity demanded of a product.

Assumptions of Cardinal Utility Analysis:

1. Rationality: Consumer behaves normally i.e, if goods are available he will purchase that or if goods become cheaper he will go in for the same. He will not make impulsive purchases.
2. Limited income: Limited income of a man will force him to make choice – i.e., to purchase one commodity another to be forgone.
3. Constant marginal utility of money: If the marginal utility of money changes with a change in income, then it cannot be used as a measuring rod. So it is assumed constant.
4. Measurability: The utility of each commodity is measurable. The quantity of money a consumer is ready to spend on buying any unit of a commodity is the utility of that unit to him.
5. The hypothesis of independent utility : It means an independent unit has independent utility & it ignores complementarity between goods.

On the basis of these assumptions, Prof. Alfred Marshall has shown that the additional benefit which a person derives from a given increase of his stock of anything diminishes with the growth of the stock that he has, known as the Law of diminishing marginal utility. 

In other words, the law tells that the marginal utility of a good for a person diminishes with every increase in the stock that he already has. Gossen's First Law is the "law" of diminishing marginal utility: that marginal utilities are diminishing across the ranges relevant to decision-making.

Therefore, the Utilities of different goods are interdependent is not an assumption of Cardinal utility analysis of consumer's behavior.

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Consumer behaviour is a study about how the individual consumers, groups or organisations undergo the process of selection, purchase, usage and disposal of ideas, goods as well as services that will help to satisfy their wants and needs. This concept refers to the actions of consumers in a marketplace and their underlying motives behind those actions. The marketers expect that if they can understand the causes of a consumer buying a particular product or service, they can determine which products have more demand in the marketplace and how to present these items to the consumers.

We have collated a list of multiple-choice questions on the Theory of Consumer Behaviour below to help students gain a deeper insight into the topic.

1. Which of the following statements is true about consumer behaviour?
   1. Consumer behaviour is the study of microeconomics
   2. Consumer behaviour is the study of macroeconomics
   3. Consumer behaviour is the study of income analysis
   4. None of the above

Answer: a

2. Which of the following statements about utility is correct?
   1. One of the main characteristics of utility is that it is a relative concept
   2. One of the main characteristics of utility is that it is a subjective concept
   3. One of the main characteristics of utility is that it is a psychological phenomenon
   4. All of the above

Answer: d

3. Which of the following concepts is true?
   1. The ability to satisfy the human wants in a good or service is called its satisfaction
   2. The ability to satisfy the human wants in a good or service is called its productivity
   3. The ability to satisfy the human wants in a good or service is called its profitability
   4. The ability to satisfy the human wants in a good or service is called its utility

Answer: d

4. Which of the following statements is true about the law of equi-marginal utility?
   1. The law of equi-marginal utility is known as the law of decreasing utility
   2. The law of equi-marginal utility is known as the law of increasing utility
   3. The law of equi-marginal utility is known as the law of substitution
   4. The law of equi-marginal utility is known as the law of contribution

Answer: c

5. Which of the following statements about the addition of utilities is correct?
   1. The addition of utility that is obtained from all the units of a good or service is called the total utility
   2. The addition of utility that is obtained from all the units of a good or service is called the additional utility
   3. The addition of utility that is obtained from all the units of a good or service is called the marginal utility
   4. The addition of utility that is obtained from all the units of a good or service is called the maximum satisfaction

Answer: a

6. Which of the following statements is true?
   1. The capability of any commodity to satisfy human wants is known as utility
   2. The capability of any commodity to satisfy human wants is known as taste
   3. The capability of any commodity to satisfy human wants is known as consumption
   4. The capability of any commodity to satisfy human wants is known as quality

Answer: a

7. Which of the following about the relationship between marginal utility and price is correct?
   1. The marginal utility of a commodity or service must be equal to its price to ensure maximum satisfaction of the consumer
   2. The marginal utility of a commodity or service must be greater than its price to ensure maximum satisfaction of the consumer
   3. The marginal utility of a commodity or service must be lesser than its price to ensure maximum satisfaction of the consumer
   4. There is no relationship between the marginal utility of a commodity or service and its price

Answer: a

8. Which of the following is true about the relationship between total utility and marginal utility?
   1. The total utility of a product or service is maximum when the marginal utility is negative
   2. The total utility of a product or service decreases when the marginal utility is negative
   3. The total utility of a product or service increases at a decreasing rate when the marginal utility is negative
   4. None of the above

Answer: b

9. Which of the following statements about the demand curve is true?
   1. The slope of the demand curve is upward from left to right
   2. The slope of the demand curve is downward from left to right
   3. The slope of the demand curve is parallel to the X-axis
   4. The slope of the demand curve is parallel to the Y-axis

Answer: b

10. Which of the following statements is true?
    1. In the case of necessity goods, the fall in prices does not lead to an increase in demand
    2. In the case of comfort goods, the fall in prices does not lead to an increase in demand
    3. In the case of luxury goods, the fall in prices does not lead to an increase in demand
    4. None of the above

Answer: a

11. Which of the following statements about demand is correct?
    1. The main factor that affects the demand for a product or a service is its price
    2. The main factor that affects the demand for a product or a service is the change in income levels of the consumer
    3. The main factor that affects the demand for a product or a service is the taste of a consumer
    4. All of the above

Answer: d

12. Which of the following statements is correct?
    1. Goods that can be used alternatively to each other are known as substitute goods
    2. Goods that can be used alternatively to each other are known as comfort goods
    3. Goods that can be used alternatively to each other are known as complementary goods
    4. All of the above

Answer: a

13. The Law of Demand is a _______.
    1. Qualitative statement
    2. Quantitative statement
    3. Both a and b are correct
    4. Both a and b are incorrect

Answer: a

14. When the price of coffee rises, the demand for tea _____.
    1. Falls
    2. Rises
    3. Stays the same
    4. None of the above

Answer: b

15. Elasticity of demand is a ______.
    1. Qualitative statement
    2. Quantitative statement
    3. Both a and b are correct
    4. Both a and b are incorrect

Answer: b

Also See:

• Theory of Consumer Behaviour
• Consumer Awareness
• Consumer Surplus Formula
• Difference Between Customer and Consumer
• Consumer Protection Act Mcqs

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