Question : Assertion: A consumer's demand curve for a substitute good slopes upward.
Reason: As the price of a substitute good decreases, the consumer switches from the more expensive good to the cheaper substitute, leading to an increase in the quantity demanded.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct option is (a) Option A Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion states that a consumer's demand curve for a substitute good slopes upward, which is true. A substitute good is a good that can be used in place of another good for a similar purpose. When the price of a substitute good decreases, consumers tend to switch from the more expensive good to the cheaper substitute. This leads to an increase in the quantity demanded of the substitute good.
The reason provided explains this relationship correctly. As the price of a substitute good decreases, consumers find it more attractive compared to the more expensive good. This leads to a substitution effect, where consumers shift their demand from the more expensive good to the cheaper substitute. The result is an increase in the quantity demanded of the substitute good.
