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Question
State two circumstances under which the demand curve slopes upwards to the right.
Solution
- Giffen goods violate the law of. demand. The demand curve slopes upwards to the right in case of Giffen goods.
- Law of demand does not apply to prestige goods where demand slopes upwards to the right in case of prestige goods.
RELATED QUESTIONS
Explain briefly anyone determinant of an exceptional demand curve.
Distinguish between:
Inferior goods and superior goods
State with reason whether you agree or disagree with the following statement:
When the price of Giffen goods falls, the demand for it increases.
State with reason whether you agree or disagree with the following statement:
When the prices of Giffen goods falls, demand for such goods rises.
State with reason whether you agree or disagree with the following statement:
There are no exceptions to the law of demand.
Questions:
- Demand Curve D1D1indicates ______ (1m)
- Demand Curve D2D2indicates______ (1m)
- Name the above diagram and explain. (2m)
PASSAGE
Mona visits a shopping mall near her residence. She shops for monthly groceries which include rice, wheat, sugar, cooking oil and pulses. She purchases additional quantities of sugar much more than her monthly requirement anticipating that prices may rise in the coming days due to festivities.
She observes two different qualities of tur dal out of which one quality is inferior and the other is superior. She does not purchase the low quality tur dal even though its price is comparatively lower. Instead she prefers to buy superior quality tur dal.
- Identify the exception to the law of demand in the given passage with reference to purchase of additional quantities of sugar much more than monthly requirement anticipating that prices may rise in the coming days due to festivities (1mark)
- Identify the kind of good with reference to low quality tur dal (1mark)
- Express your personal opinion based on the above information. (2 marks)
State with reason whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
State with reasons whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
State with reason whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
'Price is an indicator of quality'. The statement applies to ______.
When price of Giffen goods fall, the demand for it increases.
State with reason whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
Give one point each of similarity and dissimilarity between Giffen goods and Veblen goods.
What are Giffen goods?
Why are prestige good an exception to the law of demand?
