CBSE Class 12 Economics Consumers Equilibrium And Demand To Micro Economics VBQs

Very Short Answer Type Questions(1 Mark)

Question. What cause an upward movement along a demand curve?
Answer. Increase in price while other factors are constant.

Question. If the number of consumers increase, in which direction will the demand curve shift?
Answer. Rightward.

Question. A straight line demand curve is given. What will be elasticity of demand on the mid point of this curve.
Answer. Equal to unit.

Question. If the slope of a demand curve is parallel to X-axis, what will be the elasticity of demand?
Answer. Perfectly elastic.

Question. Why is demand of water inelastic?
Answer. Because water is a necessity good.

Question. Define price elasticity of demand.
Answer. The price elasticity of demand is the degree of responsiveness of quantity demanded of a commodity to the change in its price.
 
Question. Why does total utility increases at diminishing rate due to continuous increase in consumption?
Answer. As more and more units of commodity are consumed, marginal utility derived from each successive unit tends to diminish so total utility increases at diminishing rate up.
 
Question. Due to decrease in price of pen why does the demand of ink increase?
Answer. These are complementary goods.
 
Short Answer Type Questions

Question.Explain how the demand for a good is affected by the price of its related goods.
Give examples.
Answer. Related goods are either substitutes or complementary Substitutes Goods : When price of a substitute falls, it becomes cheaper than the given good. So the consumer substitutes it for given good will decrease. Similarly, a rise in the price of substitute will result in increase in the demand for given good.
For example Tea and Coffee.
Complementary Goods : When the price of a complementary good falls its demand rises and the demand for the given good will increase. Similarly when price of complementary good increases, then demand for given good decreases.
For example : – Car & Petrol.

Question.Distinguish between normal goods and inferior goods. Give example also.
Answer. Normal Goods : These are the goods the demand for which increases as income of the buyer rises. There is a positive relationship between income and demand or income effect is positive.
Example ; Rice, Wheat
Inferior Goods : These are the goods the demand for which decreases as income of buyer rises. Thus, there is negative relationship between income and demand or income effect is negative.
Example : coarse grain, coarse cloth.
 
 

 


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