Practice Questions
Concept Explanation
When price or consumption changes, total expenditure changes according to both factors. Expenditure = Price × Consumption.
Price Increase, Consumption Same
If price rises by p%, expenditure rises by p% (consumption unchanged).
Compensating Consumption Cut
If price rises by 25%, to keep expenditure same, consumption must fall by 20% (since 1.25 × 0.8 = 1).
Net Expenditure Change
Multiplier = (1 ± price change) × (1 ± consumption change).
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Q1 Easy
The price of rice increases by 20%. If consumption stays the same, expenditure increases by:
ExplanationWith unchanged consumption, expenditure changes by the same percentage as price. -
Q2 Medium
Price rises by 25% and consumption falls by 20%. Net change in expenditure is:
ExplanationNet multiplier = 1.25 × 0.8 = 1.0 → no change. -
Q3 Easy
If price decreases by 10% and consumption increases by 10%, expenditure changes by:
Explanation1.1 × 0.9 = 0.99 → 1% decrease. -
Q4 Medium
A family spends Rs. 4,000 monthly on fuel. If price rises 15% and consumption is unchanged, new spending is:
ExplanationNew spending = 4,000 × 1.15 = Rs. 4,600. -
Q5 Hard
To offset a 25% price hike, consumption must be reduced by:
ExplanationNeed multiplier 1/1.25 = 0.8, so consumption must fall 20%. -
Q6 Easy
Price of sugar goes up from Rs. 40/kg to Rs. 50/kg. The percentage increase is:
ExplanationIncrease = 10 on 40 → 25%. -
Q7 Medium
If price falls by 20% and consumption rises by 25%, net expenditure change is:
Explanation0.8 × 1.25 = 1.0 → no net change.
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Q8 Hard
Monthly grocery bill is Rs. 6,000. After a 10% price rise, consumption is cut by 5%. New bill is:
ExplanationNew bill = 6,000 × 1.1 × 0.95 = Rs. 6,270. -
Q9 Medium
A 50% price increase would make expenditure Rs. 7,500 if consumption is unchanged. Original expenditure was:
ExplanationOriginal = 7,500/1.5 = Rs. 5,000. -
Q10 Medium
Price increases by 10% and consumption by 20%. Net expenditure increases by:
Explanation1.1 × 1.2 = 1.32 → 32% increase. -
Q11 Easy
If price doubles and consumption halves, expenditure:
Explanation2 × 0.5 = 1 → expenditure stays the same. -
Q12 Hard
After a 12% price cut, a person buys 10% more. Expenditure changes by:
ExplanationNet multiplier = 0.88 × 1.1 = 0.968 → 3.2% decrease. -
Q13 Medium
Price rises 8% and consumption falls 5%. Net expenditure change is:
Explanation1.08 × 0.95 = 1.026 → 2.6% increase. -
Q14 Hard
A commodity's price falls by 15%. By what percent must consumption increase to keep expenditure unchanged?
ExplanationNeed multiplier 1/0.85 ≈ 1.1765 → consumption must rise 17.65%.
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DS1 Easy
What is the new expenditure?
Statement IPrice increases by 20%.
Statement IIOriginal expenditure was Rs. 4,000 with unchanged consumption.
ExplanationNew expenditure = 4,000 × 1.2 = Rs. 4,800. -
DS2 Hard
By what percent must consumption be reduced?
Statement IPrice increases by 25%.
Statement IIExpenditure must remain unchanged.
ExplanationConsumption multiplier = 1/1.25 = 0.8 → reduce by 20%. Both needed.
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DS3 Medium
What is the net change in expenditure?
Statement IPrice rises 10%.
Statement IIConsumption rises 20%.
ExplanationNet multiplier = 1.1 × 1.2 = 1.32 → 32% increase. -
DS4 Medium
Is expenditure more than Rs. 6,000?
Statement IOriginal bill is Rs. 6,000.
Statement IIPrice rises 10% and consumption falls 5%.
ExplanationNew bill = 6,000 × 1.1 × 0.95 = Rs. 6,270 > Rs. 6,000.