Question : Assertion (A): The price-demand curve has a downward slope. Reason (R): Inverse relationship between price and demand is stated by the law of demand, holding all other parameters constant.
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 the correct explanation of Assertion (A).
Solution : "Quantity demand of a product diminishes if the product's price increases," is how the law of demand is defined. That is, if a product's price increases, fewer people will buy it. Another way to put it is that the downward slope of the demand curve emphasizes the asymmetry between price and quantity desired. Hence option a is the correct answer.
Question : Assertion (A): The price demand curve is negatively sloped. Reason (R): Inverse relationship between price and demand is stated by the law of demand, holding all other parameters constant.
Question : Assertion (A): The demand curve shows the inverse relationship between the own price of a good and its quantity demanded. Reason (R): Law of diminishing marginal utility advocates that consumer gets lesser satisfaction for each additional unit consumed
Question : Assertion: The demand curve demonstrates the inverse relationship between a good's own price and the number of units sought. Reason: According to the law of diminishing marginal utility, consuming more units leads to lower consumer satisfaction.
Question : Assertion (A): Currency money is also termed as Fiat money.
Reason(R): Under law, currency must be accepted for payment for all debts.
Question : Assertion: Giffen goods violate the law of demand.
Reason: Giffen goods are inferior goods for which the income effect dominates the substitution effect, resulting in an upward-sloping demand curve.
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