Theory of Demand
Theory of Demand
Q. Distinguish between a normal goods & an inferior goods. Give examples in each case.
Ans.
Normal Goods are those in case of which a positive relationship between income & quantity demanded. Other things remains constant, quantity demanded increase in response to increase in income & vice versa.
Inferior Goods are those in case of which there is negative relationship between income & quantity demanded. Other things remains constant, quantity demanded decreases in response to increase in income vice versa.
Q. Explain the cause of a rightward shift in demand curve of a commodity of an individual consumer.
Ans.
1). When income of the consumer increases.
2). When price of substitute goods increases.
3). When price of complementary goods falls.
4). When taste of consumer shifts.
5). When availability of commodity is expected to reduce in the near future.
Q. Explain the causes of leftward shift in demand curve of commodity.
Ans.
1).when income of consumer falls.
2). When prices of substitute gods falls.
3). When prices of complementary goods increases.
4).When taste of consumer shifts.
5). When availability of commodity is expected to rise in the near future
Q.What is meant by inferior good in Economics?
Ans.
Inferior Goods are those in case of which there is negative relationship between income & quantity demanded. Other things remains constant, quantity demanded decreases in response to increase in income vice versa.
Q, State the law of demand & show it with the help of schedule.
Ans.
The Law of Demand states that other things remaining constant, there is an inverse relationship between quantities demanded & own price of the commodity.
Table. Demand Schedule. Px (Rs) | Qx(units) | 10 | 100 | 9 | 150 | 8 | 200 |
Q. Distinguish between demand by an individual & market demand with the help of a schedule.
Ans.
Individual demand – it shows quantity of a commodity which an
Q. Distinguish between a normal goods & an inferior goods. Give examples in each case.
Ans.
Normal Goods are those in case of which a positive relationship between income & quantity demanded. Other things remains constant, quantity demanded increase in response to increase in income & vice versa.
Inferior Goods are those in case of which there is negative relationship between income & quantity demanded. Other things remains constant, quantity demanded decreases in response to increase in income vice versa.
Q. Explain the cause of a rightward shift in demand curve of a commodity of an individual consumer.
Ans.
1). When income of the consumer increases.
2). When price of substitute goods increases.
3). When price of complementary goods falls.
4). When taste of consumer shifts.
5). When availability of commodity is expected to reduce in the near future.
Q. Explain the causes of leftward shift in demand curve of commodity.
Ans.
1).when income of consumer falls.
2). When prices of substitute gods falls.
3). When prices of complementary goods increases.
4).When taste of consumer shifts.
5). When availability of commodity is expected to rise in the near future
Q.What is meant by inferior good in Economics?
Ans.
Inferior Goods are those in case of which there is negative relationship between income & quantity demanded. Other things remains constant, quantity demanded decreases in response to increase in income vice versa.
Q, State the law of demand & show it with the help of schedule.
Ans.
The Law of Demand states that other things remaining constant, there is an inverse relationship between quantities demanded & own price of the commodity.
Table. Demand Schedule. Px (Rs) | Qx(units) | 10 | 100 | 9 | 150 | 8 | 200 |
Q. Distinguish between demand by an individual & market demand with the help of a schedule.
Ans.
Individual demand – it shows quantity of a commodity which an