EXl.

:f~C[SE
\ '

-- --- ------

• ,np- C\: ,t,..- tkff" ~ O l ~ ~bo'W'S'

- ~ -. -:l''.. de~un Jt"d

., :E=-t ht- ..r ~ ll"'f''~ ,cd o l'11nf~ l rt>lated ~ ben. a<. ;a r C'~u lt of r i~ int~ F"'k'.>
~~ &; ••• • t"c c:: ~ 1Dcr ~,·

,.

tr~ ~J : nt

"""' e::,.,.,.. ..r-. • ,-..-fM',e,-a-J,_,~,. t'IWT. ru, 1i1 lb._ f,,ic c." lJ{ oOt'
rt-~t.. lr~ l n
l «c-'-"'-.~ d r
 -
d 1:rn gc in :
an d c ur vt" occ urs due to
Mo ve me nt :,l o n,z thl' ,km
11 · , pr ice o l t he rom mo d1t v.
(.l' P \ 11 he rnm mo dity
i/'II ,kc,•im 111 ,int \ n fJc m.m
cl oth<.'r th.in ow n price of t

I t><., th t,d .1n d (h)

I•
di m1nC' rt dll '''' cfe ma nd for ele ctr ic app lia nce s to:
ele ctr icit y wi ll c.au se the
An inc rea se in the pri ce of (I>) Lill
tJ. l ,
, .t n,t:
(d) 110 1w o l th(•~c
,: l n•n iJin the ,.1n w
c me an s: . .
I~ Shi ft in den13 nd cu n~ mo dit y
, J , fall in ,kn u nd due to n ~c Ill ow n price ot the com
Ill 11w11 pri rc of thl· com
mo di ty
t-,' n,e n ,f.:111.tnd dm· t11 1,111 mo <l1tv
nthl.'r th.m ow n pri cL' of the rom
1
., h 11,.-L' 111 ,km Jnd dllL ' to t.1c co~
•l \. r-- •

td 1 Oll: lt' ,11 r hL·,,· al goo ds) wi ll cause :

fall in inr om <' o f t he con s um er (i n cas e of n o rm n t on the dem and cur vL'
1
~ -'
t hl' dl'm ,1nd t:lJr \ L' ( t-i) dow nw ard mo vem e
, urm .,rd nh1 , .:-nwnr 1)11 .md cur ve
1
dtl' JL'm ,ind uir w (J) ldt w.1r<l shift oit hl" dem
, n:-zh•w .trd d
, 1dt ,1t o the r thi ng s
o f a com mo dit y du e to c han ge in its o wn pri ce,
nd<'d
Ch:anit<' in q ua nri t)' tfr ma
10 l:
rem ain ing , on sra n t . i-. c:1 1let (b ) p n r l' dfo ct

(d) suh sttt urinn l'lrcct

•nc )}'I <' l lft'l I
of d<'m a n d , w e mo ve :
- In case o f con t r;ic t ion na nd curve
1
d rr,,rn low c1
f'"l ll! 1,, 111•p~r po1nr nn tlw , .1 ml' dL'r
dcm .1n d l ill'\ '1'
rt,• ,,-. ri~h• on th<' 111,: lhl I
rur ve
1a1111r 1111 rlw , .mi l' ,km Jnd
, rrnm un wr p••t!ll 1,, /,, .1, 1
t, n r/· · 1n11 1h,· 1 d,i n.111d
, u1, 1•
r ,ltr

IA Jnc red w <f<'m,1nd occ u r 1; rlu l ' ro:

10
pi,•1111·11 1.11 v 1:o<> d
, d·.r,·.1·, 1.. p r1l • ii 111 om
,,, 111111 n,,. •• JH' 11\l ll ll L"r
'h ,nl rc.,
Ill J'!I •• f 11<· r.;l, , IHl ll l ,
L• JnU < J \ •
1
I \ I fl l''
l' J

ol t/P m a ncl rd e r t o:
J9 AuumptlOll'> o f rh(· l.1w
n, , rl., , ,,11 11no d11 ,
..-m,•.;r:r n,·1 1
1
J
1 h.111 "" 11 p1 11 l' 0 1· t ht·
«>m lll<>Ch t y
d( !11.11 ,I • ,. I1,
h t.kl t nr., n ,uH , , ,:

n,P \I.J rli , ,1 •Ji pr d,11 11 ,!

,j r. 1 ·r:,: 1 , l ~l t•

J t 1..••1 ..v hl· n

W I ~"'· o f de md n cf h 'll i o /
~, ,.
• ,n nw ,rt ·t· ., 1.

•' \t:
1
)1 • J "11 I'll • 1 n 1• ' ' " l'

•· :-h• • 1 •• , .Hu rh ,11 ,uh,111111 1nn t·fll ·l I

r <,_ ,·. ,,: 1:1 ,m,
\ till \fll ll(! llll dh•1 I
JI I'~ .· \t" 'fl . I'll ,•fl· ! I to:" , , 11 lJl
lt
.
-~ t,IJ rn uw n Jirr re ,,, ! hi:
'
, ommv<Jiry
,. · 1,. r,·., r, 1 •,n 1, 111 rl1L
, , ,11 •.1,; n cr

J ,.._, r,,1 llH·

le.t d i w :

• •11·.i 1rn1
I h i dc< .rl",I',(: 1n

r (dJ 111.,rh (.t) Jlld

re.II
(l)
Jlll'Otn L' ot the con ,um L·r

175
Ans wen
I. (b) 2. (b) 3. (a) 4. (a) 5. (b) 6. (a) - . (b)
8. (bl
11. (c) 12. (a) 13. (b) 14. (c) 15. (d) 16. (b) Q _ td 1
17. (a) 18. {d )
21. (d) 10 ib,

fl. Choose appr opria te word a nd fi ll in the blan k

1. If price of mango rises, demand w1U
2. If price of perrol goes up, demand for cars will __ Ii
3. Demand schedule and demand curve give the
1nt'0rm:nion.
4. Because of law of dimin ishing margi nal utility, deman d cur\'e
slopt>,
.
s. Law of dernand exp1ams I . h" b \upwa
___ ___ _ re au ons 1p rtWl't.'n O\\ n pnce o r" th . . rJ l'.:-1i.·-\ ~
demand. l rnm:nc,J ...

6. Expectations of a fall in price of a good leads ro fpo\1tnc /.~

in 1b dt."mJn d.
7• The law of demand does not apply ro _ __ • <: ••
goods. lno,,.... ,1 -
8. Market demand cun ·e is a ___ ____ • UL.L_ \.. •
summation of ind1YiJu.1I demJn d run ·~s
~ .

(hom.onuJ,1 r- _
Q_ Pepsi and coke are an example of ___ __ goods. 1complememaryis:.:::.:.
10. 1n case of inferio r goods, income effect 1s _ _ __
( posmw r.:-:.::-
Answers
I. contract 2. fall 3. same -L down ward :; m Yerse
6. fall 7 Giffen 8. horizontal 9. substi tute 10. negative

lll. True -Fals e Alter nativ es

In the f ollowi11g qursrion.s (1-Z ), two sratcments art' J!ive,L Read
the srarem e,m ci.n>fully and d :ru!i ru ,- ·
alternative among those gfren belou··
Altern atives:
(a) Both the srarem ents are rrue
(b) Both the starements are false
(c) Sratement 1 is true and Statement 2 1s false
(d) Statement 2 is true and Statement I is false
1. Statem ent I : Market demand curve is the hori zontal su mmau o n
of 1he 1nd i\ iduJI ~ -•
cun•es.

Statem ent 2 : Slope of demand cun·e is estimated as (-) LlQ

LlP .
2. St:nem eot I : Substitute goods are chose goods which co mplet e rhe Jcm.r n d f r each othc::
°
Sratem cot 2 Complementary goods are those goods which can be subm-tut ed fo r ~ ch oth~r
.tul'iw ers
I. (c) 2. (b)

176
 1
l-.,l~or n•crPn iro,',t,. t,P ·;,r,.'!dn nt1i::th 1 L<>rn ct\ rit.:c·v·• ,.f_1'l.Jt:rnci•. ·.-c~,
. 0 f
. .-h00,..C l l l Columo [I. chOOM" rhe corr('ct p.tu
f\ · L h set of s tatcmcn ,s gi \·c n in Column I ;rnJ
t. f roOl t c .
statem en ts: ( .4.!Jomn II
Column I
l '~t. .~ . . i-..i.J: ,..... ) ,~ ?Uf-.. t.a& • ,; -·a;:-~· .... r· _.:·.
Nt.::t: o l t n4". · 1rm-d : ,

f3 Sur"111ur 1• L:""""
c j'<orn.11 .:L~.,J,
I) fncrl•J'-<" m ,!, r.1)n,I

A1t c rna11 ,•c,;: {t,1 B·- II

(.1, l : \ -(1
d D -'I\
1,: c -11111 of al u.•rn.1t1n· , ,c 1ven in C,,Jumn fl by rn:.1tchin ~ ttK-m \li' i:h
1.. Ident ify the co rrc.-ct ~cquc- ncc
respKci vc itc-m,; in Co lumn I: Col umn (I
Column I
-\ [),:m.,nJ ,un ,·
B G11l,·n !,!OOJ, .~:':".-.\.("''. ,•.,;~ • " l : •"'•t r ••• -
(J ... A•: t •-, ~,.~;:.J • 1~
C. c,~mpkm ,·nun >="''J, i t ier .. · ;~ ,l rr;m, ..J&r·,

:\ 1-'! zhh ,::.~•;. · r~ .. -...!,

D ContrJ.:t1 ,in ,,, J, ·nJnJ

Alte rnatives: t• A- 'i:: B- :, c-::\ ~>- ·1

t.1) A - (i1). 8-\ 1\' l C-,d l)- Ill I
•J .-1\- 111, f\- t ( . - ! ! ". iJ- I,,
((1 A-(1v l B- 11, C- 111) D-(11

I. 1dl 2. (.1l

\" Asscrtt nn :1nd lk .. :-t1:11n i~

/nth.· (oliuin~ ,7u,·r1•: I\/I! .i (1:rrn. nro,r \,s.r! •. n( -\ 1 i,f!!.:,u ~i,~i.;~: . :m!'r.: ff'.- ,,f.'., (J: il:e

.. vrr(l7 c;/t, r n ..,"r: ,· t.1rra:;:.: :h l."I: .. ,1 f, In::

Altern.1ti \·es:
t J) Both As, ert1u n (,\ ) .1 :,d Ri:J,0:1 R J .Ht· trm· .ind R t•J<..Jl! '
~ J\ :t:•: c ,·rrl"Cl l:'xr!..in.it:c-. t')! ;\ ,-.e:, ;c.:, /·.
.:ir , r,: .'\_;.•,(. r.. 1,;r: :\
tbJ Bo1h :\~scnion (A ) JnJ Rl·J,011 I I{ 1 J r<· t rut· anJ Rt•.tc,,)n ! R 1, n .. 1 : he c, ,rrc,, i:rp!,J11.H1
1

le) :hst>mun (,\ ) t 'i tnt t.' h ut Ri:a,nn ( R 1 " IJbt'

id) :\~~l'rtlon ( A ) i, t.1lw h ut R.t:.1~on ( R 1 1, t rul'

\VIH.:n pn ,t' pf ;1 ~ood incrl',"i:~ Jt·mJnd fo r ir, , u l->~'.11.::e good r. -,t-~ J~.::! . :_ r.
rr<I.;.
1. :\~S"rt111 n 1.-\/
Rt'a.,,m (R ) Su b~tllute good" .i re rhos<.' gooJ s wh,ch , Jn b<_, :nt i:rch.m ged fo rt..:-•·
2. ,\~Sert 10n ( \ / \Vi th I.ill 1n pn n: of.1 com m l>dlt) ri:J; 1n com,· u t t he ,on~ume r incn.>.J~~
R<:.lS(lfl (Ki Le.·" of thl.' guod c m bt' brought J t tht.> ,.;me .i b, nim c ,n-:orn~·
.'\ns,, er'>
I. (a) 2 (c)

1n
;
\ I ,. \ni• I irtrr~· An--\h ·r '.-\.· it h Jtc,,,...,on
...
.. 1,..- 1
,
•
•, 1, :r'""' !lt• , .,n ( u/lv \\ ·1;1,• 1 , 01 11 i rJ, n 1raw 11 .

llitrnand ior a ('ommooity can <'Xist independent ~fi t~ ~rice.

4..M I ,i , 11 rtu.,,,1 r1, 1 ,t ,-Pni11w,lit y 1s .tlw.w~ cxprc~~ed w11'h rclcrL' l1tl' 10 pricl',
'" , . .atrnandN.I i~ a !!ipcdfic amount of st commorlity that the co
1 "o!H\ 111 , , . . nsulller i
, , 110, 1 • ~ ific ,,rire. while dt'm■nd as n~•: 1 rea~) 1,.
, rc, 1 .~ r,~"' 1..,1 ,kn,,m d tl'fi r, to , \·,11 w u, q11.1n11t1C's o t a comm odit y tlrn t the cons
.• t1rner ,~ ,
..• 1 4I 1fnrn1 .-.,,~,
,. ....... 1
lbk p i ll( ' rc~i.,

~or• familv flf four, drmand 5Cbcdule for rice should be the same for ea h
J · . . c rnemhe
~ , 1 ·1,, t, ml'1\h<-t \ dl'mJnd fo r n et! depend~ o n h is o r her preference :ind tast , . r.
,\ q~ , . C 10r Tice
" C'rfftand for,. c-ommodity refrn to the ent ire demand schedule. ·
.,.~n,. .,· ,• ,,. r• 1, n111,d for :i, nmmoJII \', refe rs to th e entire demand \ Chee.Jule \ ho\vinvc- variou ..
;'•r ,~ n rr,•"lit, 1hat tht h11vrrs in the m:trkct an· ready to buy at different pos~ibl squ ,.
e Pn-:~,,.,
t t. !""';:

" f """ wbt-n r,,

remainJ constant , Qx may inc r ease o r decrease.
\ M, 1, ~ •; nH , in• n'.1<, · or <ln rc.-<c- due- 10 r ha ngr in o ther dt' t<.'rm rn an t~ o f demand ft\•,-
\. .. ff

t, li,d1\ •du.al dr1mind i1 a concept re lated to microeconomics, wh ile m arket demand.

rsa ro--
rr latNi tr, m&l rOKoootnics.
''" j •, 1~ •Ii :nth\ 1du,1l il>'m,in<l Jnd markft dt>m,incl ar<> relatc:d t P rn, , rn,·to1w m1c~. M.irkt>t drri
I'" • ,rt r-1 , ;1\1 l It 1dC' f \ Jr1 dcrn,md for O fl {' co rnmodll } ,

l•* ufckmt J\d mu•l f1il if Ira of a commodity is demande<l e ve n w he n incomeof tht ~
rn,, ..,
" m, I.._,.,, l .. ·.• ,,i ,lmi:m<l d ltt'\ not l,111 wlwn It'',\ of ,, tom n"H•cli ty 1, , lc·111 ,1111kd while- inrnmc ..f1·,
1 ... , 11 J, nu•,d v.,rh ., n,e 1n 1ncnmt· ,., ,i ,nplv ,1 l .l',l' or in t i 11.i hooJ .
l If duJl'O'Mbk' int..om" of rhe people rise11, t heir demanci c u n e to r bu tt er may not o~y 1kt
Cf de~ft.d,
~r., ,,1• • ~ t• n, 11•1•11~.ihl,• ir•u,111, nnh lraJ•,t,, ,1,h1ft 111 d C'111J.1HI t ttJ\ l' It d o l' !> not mcJnthdtth.,
1• r. 11t1 la, 11, l:,w ,, ;11 1nu1 • 111 Ix ,,1l1d 1111 1h,• II C\\ ,km,1od ~u, , ~· ,, ,veil a:. o n the old.

•• lo, ,..,. of ,-ulnt11u1.- a•>o>CI\ , a fa ll in l)fiett ofGood-X causes a f.ill in d emand for Good-)'.
i\f!• ! .. • , 1 , ••J'IC r ~ , 1t1J n•pl.!u--. tiw 0111• \\ h1Lh 1•, m n 1,, t'Xp, 11'>1\ l'
Ii• In , •roe· nf t 0 lliJtlrltl( ntary a()()(fr;, a riw in pric.- 1) ( Good-X ca u~e, a rise in demand for Cool'
1
~ II• ' i' · • ' , •' l '• 'Ill ftf CJ i,- ru.,,h , 1 r 1,1• 111 p 11u· u l C (,l1c.l X , n1wL lfall in demand for l ·

;i 1' ••
· h resnKtt·
P •1t11t)' <kman,it'-<1 land not Je mand for a co m modi ty) t h a t c banges Wit
1
,,.. ·
,,._!1J1 l fl<'.

~.. ' '

· • '1· :~Hh d ill .t ,:1111m11J1t , t b.H dun !-,n Ill ' '' ' )'""'' to ChJf\gt' 1n
,'-'a'
'" "wl',
· ' f 1 '-1t •u • ,... ,urq•" n ,.,l
•·r,,,\O. n p t 1l 1 111 tJw,·, ,p1m u i 1l\ 1,11 ,J11hcon,rJnt.
I• , lu n-,.- ~ 1<i ioc-.,JJW'fau-.ea,lll
1.. · ( •
ten d4'mand,·un·~. w h i lcthangt- in o woprice of the rom:»----
,,._ a.,,
dt · ''' 1' • ·, ,1.r ,.1t
I 1,,, Iu11 i:;t ,ll r.. ·1.11 . 1\t h, r 1h,u1 ,,\\JI p nt,
. 1 ,1 th, •· '
'• • t · :"~ · ... ,:-;~ J f \t_.l !a,, .. , -r l''' fLr,,ht·,
· Sb. f 1 , 1; ck n. i>d d .
_._ duv~ uc~. no t O(<ur 11{1 lona as own p n c-e of 1hr c<•Ollll 1
. od ·ty is l·OD£~,,t
AQ I 1
' " 1 ' J, · , ,, , h.u .i: .. 111 th .. , r I t,,, 1111 r thJ 11 , , ,,.. '
 er's
pric e ofthe com mod ity rise s, and con ~um
rd s hift in dem and cur ve occu rs whe n own
14. fon ~a.. rern111n.. 11 con,"tan r• d
. c,wn pric e of the com mod ity rem ains con stan t an •
1ncom " r w·ird shi ft in dem and curve o ccu rs whe n
Fa I~c. Fo· ·
Ans. me r\ inco me r1<,cs.
con<, u ,
,e in dem and refe rs to exte nsio n of demand , _
~ Jncr e~ .
rs tn
.
incr ea<,c 1n quan tity dem ande d of a com mod ity at Jt'> er.t1sring pnc e
1 lncre;isc in dem a nd refe - Jn of dem~nd.
FaIsc. · t'. I d curve, n()t of exte ns1<
An•• It is a situa tion of fo rwa rd sh11t 1n ( ema n
of dem and.
[)ecrea~ in dem and refers to con traction m r,di.:v a. i ·~ exim::g pr:c e.
16· F c Dec reas e in dem and refe rs to decr ease in quan tity dem ande d of a com ,
Ans. as I ,
shifr in dem and curi e, not of conr ract ion of dem a;;d .
It ,s ,1 siiua rio n o f back ward gOO<h, it is
is pM jtiv e, whH e in ca.1e of i ofer foT
case of nor m a l goo ds, inco me effe ct
I7. In
nega tive . in inc'>m'! cau-;e; 1ncrea;.e in
cerr:,1~~. a, ~;: -:;ise •·,': r.G:T.'..a:
True Inco me cffcct I\ P '>Sltl vc whe n incr ease r,f l r.:'~:" .')!" gr,r,,d-;.
,\.DS, me cau'K-s decr ease in derr :ar.d , :.s ln a.;e
goods. It" nega ti ve whe n m crc-a,;e in inco
IS. Jn case o f i n feri or goo ds, law of
dem and fajb ,
1.=:or.-?- ~ff ~ i:; g:-~ r.e~ r.:..:.
Faise . In case o t inie n or goods. law o f dem and fa:i.s only wb~ n r:eg ~·;e
An!. .-:,:-"" c1::::a.::c ~re-;::-::..:
ion e ll ect \X' hen nega r1ve inco me effec t 1s /es\ th.m s..::r;r:::i:: 'J:: ~~ ~ :a-,,,;
\ubs titut
t:111. th,: con sum pcio o -,fa n
con rum ptio n of a nor mal goo d to
19. An indi vid ua l can (lbif t fro m the
infe rior good .
o f the com ume r hap; iens ,v fJ..:i
Ans, r rue It h.1pp en, wh, r t he 1nco mt'
r is high er t.bao the sub stitu tion dfea.
20. Jo case o f Gi ff en goo ds, inco me eff« :. •:::~ .-....'.:.Z =.--.:. :,
C:J\e nf G,th ·n ~c.• ods, inco me effec t 1s h1g.he~ th.in r~e 'i':~3 "'..r":."'!. ':::J ~-=-=
AD!. lrue In
J S<' ' 1 l,1 tl'n !!OC>Js
1
dtm Jnd rail, in

I D.tt n P cr u re HJ , 1 l)t 11 >O ,

I.

l.

Q_

On t ht: ba , ·s t h ho
dt.A gram , idt-n t ify t bt- ry~ of goo
d whoS<- dem and c-ur n- is ~ ow:n
ht-re? ~, o r ~ ;i \ C

IJ N1 •rm d t:,,t..•<1 lnr, n,1 r g,,,, l

.., ·\II ,,1tbt.~,·
I" \
'' l ,11f,•11 :.:11,,, l
.\QJ. l ,lll~ I' ~•, ..!

P'9
 "._, ..
~~-

•• • •• •
, - - 2. . -
Price
(<)
-- - -- JO

-- b b- ·s o-fthe above-menrioned inform at ion answe r tm- .

fo llowin g q"..estaon•
0 n t e ass
The given situation 10 the above table J.S ctlled - - - - - - - -
(a) increase in demand lb , decre.1,t.> in ~km.rn~

(cl extension of demand (dl .:-tin tr Jt110n nt d t m,rnJ

Ans. (c) extension of demand.
Pirturr B
3. Picture-A

~
-~
Breao
..-"'.

·e.•

·/I
Pe·

esentt-d an 1hr pt<';.-.

Identify the type of goods (substi tute and compl ement ary ) as r l'pr
cun e.
above. Also. explam tbe effect of rise ID price of eacb good o n de mand
,..:b:.t1tute i::\.'Ods
Ans. Picture-A represents complementary goods while Picture -8 represc.-1:,,
od1er 'J.- !l~ p- :
Complementary goods are those goods which complete 1he dt>rnan ,1 : ~ t'lCh
w till. Oe-:--..i.:..L·..-
complementary good increase~. demand {or J given good b.ay Goou- \ ·,::nds
xampk le= ..5 ,~--.
tor Good-X w1U shift to the lcfr. 1mpl>1ng quanuq demanded de<rt.'o ., l:.
and Ya!> complementary goods, like bre2d and bun er JS ~hown abo\ e 1r p, .. e
Qf Good-Y1:::· !'-.<: ·
consumers v.11! buv less of X along with less of Y
Substitute goods are those goods which can be subswutt•d tor each m:.•.'
\\"her. pr..r ..:• ' ' ·
J -~n c •.: t.,'.\
good increases, demand for a gl\en ~ood l say Good- X, cends tn r... t· L't'm,rn
U\ ,, ni.k~!. i:·
will shift ro tht nght, implying quantity demanded mcn·asi:~ Ex:im p)('; Lt-1
h,· v_ 1 .i:-,n'
~ubstinne goods, ltke tea and coffee as shown abo\'e. If price 0 1 Good ) ri <) •

,,.,n, ~r.c:\ '" - ~ ~

1

from Good-Y ro Good-X because X 1s now :el.iti\'ely cheaper A~ J n 1,; :1 1hl'

of X along \nth Im of Y

■ Case-Study Based Questions

r " ""~:1:r ::-s~J::,ri;
L RcCJithefallo:J.inghJpatr.r1uali nform.:.i :anrar({u/lyan.d ansu:rn hrq.:,·s
I
-- -- - -
[km.ind
Price
(l.oiu)

5
--- --- --- ;u

--
s
--- 5 !2

180
 -
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I. t)n t c •
t,._• ....,lit•,!
tJ' , rcJ.•<' :r: dt·m.,n,1 h d,,1,· •'< ,.' •ir:n:1~•l
10
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Z. l ) n • < ·1

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t, LkmJ11J(1:1•, ,· ,h·r·, ,, :h· :1-..:hr
1,.:l rhcr\' ,, ,!,,1., 11\\ ,rd rt:t>H'm t·l~t .1l\ r:.; :h:
1 ,f..n'..i:',! ~,:: \{'

i.ll l lttr,• 1, ufnA H.J m.n,·:n c-r .,!,,n,: •¼h· ,k:v.1:1li, :.:,'-t
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1
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, T ht.:r<' ,, J,, ., 1:,, .H ! ,.,,., . \'JIH·n: J 1on.; : ht' ,!,·1:1J:i,I, u:, ,·

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l~I !kith th t· ,t.ltl':11< ,._ J:l' •.ii"·

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7.. Cn ,,s pn n· r fl "' ' tt('U Jl' II in caltf" uf ~u t;.1i1 u,, . aoorl
,. 1tn d n u 1
Lom mt- nt.
Arv,. N,1. Cr11•,•, pn u· 1 Iii-<
I 11<1 ur, \,,,t
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I. Co nc<: pt ba<.t-d Qm:'>l ion '> --

I. 01: fin c dem a nd .
AM . lkm anr l rc-ft:r!i to tht
dc:,1 rc: to h.1·1c ., lr.,m mo dit y
bickt:<l b) ·.,,i \lJ1J~•r.•·'.·, .. nd
commodity at g_iven priu: du nn .ibal!tv 1,., P-r •.u
~ a pt:rnxl ol u mc.
1. What ifi me an t by qu an
tity dem and ed?
An s. Qu anilly dc.-mandcd rc-frr'>
to a , p<.1:1fit quantity to b<: pu rcha'>C
-d J~1 11· r .i +'-=' me pnc e of th~
3. What is a dem an d sch edu ~ ::.:-.:J"_
le?
Ans. Demand ~ hedulc i~ a tabl
<: which show~ the rda t1o n'>
,ommodny. h1p b<:t w c1: n 1,r,c•· .,nd qu.n11
t) dit-.J.:.:r..
4. W hat is a dem and cur
ve?
An s. Demand curve 1s a gra
phic pre sen uuo n of demand
pnce and qua.nmy demanded schc:du lc sh, ,wr n~ 1m c:r!>t reu
of a com modiry. oorJ!:.;, !)t'."\
S. Na me tw o determ inan ts
o f con sumer's de ma nd for
Ans. Two dc:terminants of con a com mo d ity
sum1::r' s demand for a commo
d1ry Jre :
( 1) Own pri ce of the com
modity, and
(11J Income of the con sum er
6. What is the slope of dem
an d cu rve lik e?
Ans. De ma nd cur ve slo ~
do·.,,·nw ard fro m left ro rig !:le' ;.1, rt';'. -~_"
ht, ind ica u ng inverse r<:! au
quantity demanded of a commo
dity. o ns h 1P 1 ... ' ?,.,.
7. Wh at is tbe slo pe of dem
and cu rve for Gi ffe n goo
An s. Slo pe of der nm d cur ds?
ve for Gif fen goo ds 1s upw
ard slo ping, ind 1ca ung pos :. ~
pnc e and quantity dem and ed 1m :e reu uo n~;>
of a com mo dit y.

182
 - Q

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, , If

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f #trtJ¥ I r
'1
I., I, I (.. I •
. " . ,
..
,,.

..
, ' ,.
: 1 Jr.

AIH

.,J' , I j •• ,I I

r [Jirfioe inc:re.-tA' iri d , nund

r;:-;" ,~., •
AlJ(. 'J('ri•r, qu- r, I r•, •- .•
,, ,1, r. ;,r, ,.. . I . - ,..

'.J"-·:; pr._t:: : rr "'T'" - r ' ' ..... _~ ,i~,

____ -,.
r, ., , ••
- - ....•·-. "'·-- I• ,.,_
-

19. lf 1b1: q u antity d e n:: .a!!dt"d of Cood - X d ecn - ~ u , ~ hc :.tl.i4.C.X.kl :c r.~=.>r. ; ~ r r~4~ ._ h.t ~: ~
of good i\ X•

20. If the d em ,;,ind for Good - Y increase-, :.,\ pri c~ of ioot htr G<,,-...d-X n~ ~ ri:: tbt t,.. c. g~.od~
r~l.ated?

21. W b...t happen\ t o lhc:- ,11: mand for a com pl~mfo u r y tuod o f .i t·o mmodjty w~c 11H: pnc~ o-f r~
commodity ri ~ ?
Ans.. Dcm,ncl 11~r d j·' r...;:, t:m1.;r~-r: g,x.,J ~~!'~3 ~..f-'- ·., he:: ~.. ,- f ;::-. :-:-
·., ,n
\hl 11 tr I • ht !c: ;
ll. ff the dema nd for C~(, 1ncrt 2.,;es a~ pna- o f petrol i o ~ ho,..• a.~ these- r ...-o goods reiat.ed?
Ans. C'.\G ~ndp.::·r, .• r-:• ... :: r.• •• .. y.i,o<!•

i33
 _~ :-.,..:
, .... :-....~
' -~": '~'= - !:..~..- .: -

~ ~~~ ~1 '-- =~ ~ die

l\

?r- -a. .1:1 tt~~ ~ .:u: i:- ~:. "!'<'" .),:"f

~.x-o.----=--~ T ~
.~~ ~ ::,c.- -,.ri., ::w;; :i:. .-:--n- ~ i :i-~ :~-. r-::
: ~- l ~ ~ ~ ~ - . . . ~ ~
':'~ C I L ~ - ~ ~ " ' . : "~ : ~ ...-:.e::
-. L-;..: :br-~ -s.c ~

. . . - ~~ ~ ...... ., .. -
.: ~
.:- ~·
~
-----
-:-
•""t."...... "\.

....... ____ ._
.......... ---:::--

- -.i:
.... -..e =-- ::.~·-~~~ ..,,. ,.,..- .~~ ~~ - . - -
rp r: ~~ ~='-"--i'\..~ .~~ ~..1. :: .:i...
.::-..s.t •~ ~:-<~
~ ~ J''~ r~.i i.r.. .-.e- ~ ~ ' e

d
 .'; • ":"·~
..,. :.. ~- . . . ~...:.. - . ,. : : .::r ...-.....-=":,. -:.-..., :--_- ::::.r.: ~~ :_~ =--"'= ,~-~~ "-: -='-~ _-=: ::--,' : ~--.
~ ~ ~-"'l..'L:- ~'-' -..,.,: :,~~ -:::::::...~ ::_,:-._,. . . _:- - ..-,~ .~[ V;! ~ ....... ~ ,.. - _:::: :-•
_
~
S :,::-: -;::- - • ...._. · - ..__..:

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--· ~,..~ ..-'··: =-~........._. . .:_ . . .::~\':!' :.:. ...... :'~-=-=--=-~ :~ ~ -r •~.::; ~
....... ..:...~' ~ _ _.:_'\."'! ....: ~ - -:::-:.:-:...

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'IA ...., ~
- .n- ;; ~
. ) _, ~.,... w~.1~ ..i:~ ~ .u'I." ~x•
~!U- •• - - - - --

s
y_;; :,;t- -:- -~-
~ 1 , ~.,::_',. ..:·

h.-~ n<"'t" .,e~~ • ~ ~~ ~~ ·N r. ~ ,-,.- .h :-:x➔ t =:

; :;._..,. ,~ " , ,,::. ......,"\.'--:.~1: t;.'~ 4' -:~ :. :, ~ 1t-=...1 .~
: ~ ~ "--,d-r .1,-. i ~_i.1= .:n-:1 ,\ ~L"-'• ~.:::· :-::a:·t ...•fl~ •

«:it:~ :.lw ..;- .--.~, ~~ --c:. ~ ~~~

• "'!-_,. ~-~, ;-.:..- :-,.:s ~c--~n-.'=- ~,-...i~ .1: :~ c:-s1 : ::5~ ~""t' ~'"'~-::

..~ t ..s..., : :: ..,"":.~ r.~"'

-.
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t.tl • '-. P,•1
-.ii • err •
l' . JI,,

j'I ! • (I , { l l( 1

01.11 nr11~
{ ( I'll I 'll

'1 • I

;...... •• ,. hn,•••._,.•..,n,nt '1afn m•al lNtnn 1J., lhr)' 1111'" 1~1:.l.

lfruh l111and ii.1"
,....,..•.,..-, •-a••~ t- flf!ltc&. an £f•l!'fl hrk,,., t fa.,.";,,. t ht- marl.i • r , i. ri,-2n4
1 urt't
' ... IJ w•nHl \ 'lwtllf Jt l ,,., nt ,, ~
• , IIOffl• eA,..,j tn, Id• I lt-na.n tiNI h) I 1.t 11;,i ndf't1 h1 11.
l)up
Unu~
•l •••f lfruh fl 011,. 1 I fllU) n...

•...,~,.0-h>.• u h _.,.. nltl!f1 hr;t d JV<' i, n .- l; I lrrn.&n•f "4.IM'du.e "

M••t-.• h • ~ ~ ...,._k

i
r
Ii

Ii
 ·hc,tu lr (or ,nm m ooi r y ,'( of in di vid11 .a f ~ 1 0,J
JI i• jliV1> n ,n '™' follo wing uok
n1 I H PI rf,.m.:1 n,j ru r 1/P
l)rffl,a
, t, oi1rk r1 drrn. tntl " h 1•1i 11I" a nrf m ~ rk
[h'r•" "' ,. 1.>-m 11mt ,,( B
Vr " r .,( ( 0 11,m,ul it f X l ►m11 ncl of A
1t ;,.1ro ll!n i r~,
17 1

I.

,, rlw , !Im ••f ind ,·11d,u! r.': ,., i' h~-;-,,~ .J ·\ ,rd i1
\f , 1.. rc ,1,,m ,nd -.dv•d11l1• tnr, 11mmo,f11r \'
11.

1
' .\1 ,rkL•t llf>n u nd ~C'ht"du lr
')UJ II II I V
•I
(l n i1, l
I ' • -l
~
J , " It, .... ....,
'"f' I,

II
: f
-
• t,
• I
,.
; 11

-:

• •' •• J

OuiY P ,nark r t d.- ma n<f ~c bt-.lu h• of rtw 1ndi1

/u lu.ih R.. hul. Roh.tn ,rn ,t k(1bi r
lk-m. awl oi k otl :,o l)rnu o.J ,,! R :,i'>.~
t 11•,nM u l ,,I I< 1hul
,..,
l' rtl I'
I l '"'"'
l l n,n , I ~ .,, t ..

l'I

i,..., •.,1,111 , ,, l<,;hu 1 I lf'rn .tm l o r M,,hiao l~m~ o.l " ' Wuh, t '4.-rli."t l~mat \..S
fl (H U I l l.n t h ) (\ 11th ) t l I\ l f'I '

!'

,.

I •

189
 . bl and also draw the mark et dema nd curve .
l° ll'l'rlttt the following ta c
.
Quan tity Dema nded
. l)rma nded
Q ua ntitv I
' .
Price bv Jsha (Units) by Mis (Units)
ha
(n I

J
J( l
8
15
I/
II 22
14
30
20 22
r,

y
' Quantity Mark et Marke t Demand Curv,
Prue Quintity
Demanded Demand
t)rmandtd
t~I by Misha (Units) 10
hy l~ha
(Units) ~ 6
(Cniu l '1J
1( \=S 8 -~ 6
ct
,, ~. K IS

22 11 -- 11 22
11
o:·-..---;,--:,;----:,:-- -.--- -.._
30 25• Jl1 J:
,o l ~ - Ir, 1-1 l '• lO
Quantity (un,tsl
~(I 2l 20 ➔ 22 "' 42

\ ll • .P.nh t d '\'.11nwricah
\ ~~ ,"N' ;lh· l'l t,t' ol ,1tuuth-,rn·~n mobtlr i\ t 15,000 Ho,1.·
would you exprn 1t~ demand ,une
.• 1rt ;,,! ~ th a tavour Jbl1 ,hill in 1J~H'5
Jnd prefrrences of thl' con,u rnt•r, , prtcC' rema111in~ unl b·
j ltm~n.1, ur,1· \\Ill , hilt lo~c1rJ, 10 the ti~htl

, I ,~ ni: r.ibli- H prnt'll l\ d11• dl'mand srhe<luk of hou~d

wld,, !\ ll ,11 1d C Drnve marler de·
L,:,d-.;IP

llout1:hold A llou~1•hold n llouseholdC

l',iH
(L1ni1 , l (l 'niu)
(ti (Un 1u)
,,
I.'
,.
.J
JI

H 14

')
,., ~,
~(I
Ill Ic-

\'.,,., I ,t, !H~nd -.hnlu ll ~II. -n. ""· ~~ ' ,11

·" ·' ' '
1
~' I, 1 •·1'11"'<' 111 , llti· 111.u l1·t drm..ind ,,lw.lu lr Jnd ,lt·m.111J ,, lh'\lul,· ,,J RJlll S,•hJn .1nJ ''·
P, ., ,~ Ma rl.rt 1\-rN~J
II 4 0l S.1h.i11 !\1,1h.rn
il'ni1, I
If ii '1u1.1 ll11111)1 1l ' u 11 , l
~ll
I' ' 1.,
,. •1 '

1,0
 ••it~
.f. Calculate the dei_nao<l schedule of Raju, using ~ollo~ i_ng table. (Assum~ng Market includes four buyers.)

Price Ramesh Raju Ra him Rina : Market Deman d

~)
(Units) (Units) (Units) (Units) (Un its)
- -- ---
19 7
5 6 32
20 10 9 +4
" 21 12
3 Ii Sl

2 22 14 15 6!
23 I~ !9 7➔

[ . , Demand (by Raju): 0 , S, 7, 10, 14]

Individual demand schedules of Rakesh and Mo hit for ice cream is given ~ low. Derive market de-::nar.d
J. chedule fo r ice cream from the follo...,;ng:
s -- --
Price of Ice Cream Denund of Ra.kesh De-m2nd of Mohn
~ ~r uni t)_ (Uoits) (liuiu )

10 l
q l

Market demdnd ~hedule: 3. S. - . 0 . u:

o. Gn•~n below a re the ind1Y1dual demand scoedules of M~ .iZJ f>'..t.:'-::i- ::.::::-•~ r :rJ:~ ...e::::.c:>.:.. ,;.- --~·=-~=
and mJrkt't dem anJ rn n l' ,1s:- um1 n~ marke! mC.:u<le'!- "'"' t-·. :,~:s .\~.;:z;:.~i...-:;: 2'...:.'2 f.::-:::i-::.~ :-.:-,:c..~- =-
Price ~lag:gi
(~ ~ r u n it I (L-n i ts\

'It
i.
... J 1 \ \
~ \ ED
\
.\.

,· _... ,
\
:- ~ ....
1)11-' !\I t\ ,1 p. :.,_1
..' \'
____l ,
0 t • • - I ~"" •I'
1
•1 •·I .. f., 11th• ,~,, •I,!, ,...
• •
f'
t , ,•I " I\II ' 1 l•ltt "llr I If, I I\ !\f
I 71h, , , •I

ti,, 1111 II <"' If,, ,,, l 'Hlt I '

,, 1
1
\
'I' ,,." '' 11 I ' " ' ' ' 111 I l
' Jll•, ' " ' i '' mi I;
• n , • ,, 1 • , • ,,. I I mu,,1

) o,, It :I, I ti..

\ . 111, ,,1

II ldlln 1 £ -.•h ·'

\ '
,,, P."ntl, ,. ' 1,
41!:1 •n h1p t..:,,,.,

II
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o.,
r 11 I 1,(lll! I 1111 1 • HI!( I
1 rHHi l!I •
pl
}( I ~ If l I.' 1rtll 11111 ,·.u,,
.,, I {l(H I

I l ltlll t.01 l I1 11 I
1 .nnn 1(1 IC I
\I I
lltlll ' II II\ I ll( lfl 4111) J()P
II I
()110 'fl • ,(J I ,t II 11 I I Jll J/1 (I
,1
pt 1f ,, , , , If 4 1,11110 ·-~ "''I,,~ f •fl' l ,lfl ' . :1 11,l rh, , • .1lci-
t •, r 1 , , .•,h· ,, ,, - (J
~.,,,. Ill
,
1
I• •1 ' '' I I ,,

. 111 )I lH '. l • ti '1 1• ,I, Ill 111,I • fi r ,lid, y1• f,I ~ rl,,. f,, ff,, •·1 ri1: :l•·rn 1111 1 • , 11 .•· '
\ ,,, r 111\1 1 HI • 1·• •

-
,ff
.. 1 . I "t ll I, '1 .,,
'' ·f .. ,fr I f' 1:

l'I
q , ,,

,,,
l
I \I' I• 1
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l93
 In 1· ig ) l whe n inco me of the con sum er
, 1 is OY, dem and for the norm al goo d (say
inco me increases from OY to OY , the dem milk) is OQ and
and also incr Whtr
1 ease s from OQ to OQ1•
··
Infe rior Goods
Infer ior Goo ds
Infe rior goods are thos e goods who se inco y

I
me effect
is negative. Negative inco me effect
mea ns that
dem and decreases with increase in inco Y1
me of the
con sum er and increases with decrease
in inco me of
Cl/
E y
0
i
the cons ume r. Thu s, ther e is an inverse u
rela tion ship C

betw een cons ume r's inco me and demand.

wor ds, dem and for the infe rior good
the inco me rises and increases as the inco
show n in Fig. 2S .
In othe r
decreases as
me falls , as 0 o,
- Q
D

X
Quantity
In Fig. 2S, whe n inco me of the consumer
is OY, demand for the infe rior goo d (say
and whe n inco me rises from OY to OY , the coarse grain) is OQ
1 demand decreases from OQ to OQ •
Not e that curves Din F ~ 24 and Fi . 2 S 1
0 do not show the demand curves, they just indi
betw een income of the cons ume r/bu yer and cate the relationship
quantity demanded of the com mod ity.

194