In the above figure, if D2 is the original demand curve for a normal good which price and quantity will result if incomes fall?
Point a , with price P2 and quantity Q2
Point b, with price P1 and quantity Q1
Point C, with price P3 and quantity Q3
Point d, with price P1 and quantity Q3
The father of modern economics is :
Prof. Ragnar
Adam Smith
Kenneth Boulding
Prof.Walker
Income effect states that as price of a good falls, demand rises because there is rises in
Money Income
Real Income
Relative price of other goods
Marginal Utility
Increase in the price of ink will ________ the demand of pen.
Increase
Decrease
Keep constant
No effect
If the price of a good changes but everything else influencing suppliers planned sales remains constant , there is a
New supply curve
Movement along the old demand curve
Movement along the supply curve
Rotation of the old supply curve around the old price
What kind of relationship exist between price of a good and demand of its complementary good?
Direct
Inverse
Can be direct or inverse
When demand decreases,
Price falls and Quantity decreases
Price falls and Quantity increases
Price rises and Quantity decreases
Price rises and Quantity increases
Change in the demand due to increase in the income of the consumers is known as ________ of demand.
Extension
Contraction
The law of demand implies that demand curves
Slope Up
Slope Down
Shift up whenever the price rises
Shift down whenever the price rises
A drop in the price of compact discs shifts the demand for prerecorded tapes leftward. From that you know compact discs and prerecorded tapes are:
Complements
Substitutes
Inferior Goods
Normal Goods
