CH 3 Demand (Economics )

ASSERTION AND REASON BASED QUESTIONS

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is the not the correct
explanation of assertion.
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.

ASSERTION (A): When price of a substitute good increases, demand for a given good rises and vice versa.
REASON (R): Substitute goods are those goods which can be interchanged for use.

Ans. (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

ASSERTION (A): With fall in price of a commodity, real income of the consumer increases.
REASON (R): Less of good can be brought at the same absolute income.

Ans. (c) Assertion (A) is true but Reason (R) is false.

ASSERTION (A): Market demand curve is flatter than individual demand curve.
REASON (R): Market demand curve is obtained by horizontal summation of individual demand curves.

Ans. (b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion.