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.
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 : One cornerstone of contemporary economics is the law of supply and demand. This idea states that the amount offered and the price of a good are inversely connected. This makes sense for many products since when prices rise, fewer people will be able to purchase them, which will reduce demand. The price-demand curve has a downward slope. Hence option a is the correct answer.
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.
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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