Question : Assertion (A): Change in quantity demanded of one commodity due to a change in the price of another commodity is cross demand. Reason (R): Changes in consumer income leads to a change in demand.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is False
Option 4: Assertion (A) is False but Reason (R) is True
Correct Answer: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
Solution : Cross elasticity describes the change in demand for a good as a result of the price of a substitute. Cross elasticity, for instance, refers to the variation in tea demand as a result of changes in coffee price. The income effect describes how consumer demand for goods and services changes as a function of income. In general, people will start to desire more items as their money increases. Hence both are different concepts so b is the correct answer.
Question : Assertion (A): Cross demand is when the quantity of one good is changed because the price of another good has changed. Reason (R): Changes in consumer income leads to a change in demand.
Question : Assertion (A): Demand elasticity is higher for durable commodities. Reason (R): Demand for durable goods can be postponed once they are demanded at present.
Question : Assertion (A)The demand for a commodity and its price are inversely correlated. Reason (R): A demand curve is a graphic representation of the demand schedule that demonstrates the correlation between a commodity's price and demand.
Question : Assertion (A): Cross demand is positive in the case of substitute goods.
Reason (R): A drop in demand for particular commodity results from an increase in the price of substitute commodities.
Question : Assertion (A): Complementary goods are demanded simultaneously to satisfy a particular want. Reason (R): Complementary goods have joint demand
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile