Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Covid19 outbreak became a cause of concern when, WHO announced it as a pandemic. Soon, lockdown was seen all over the world. India also declared it's first lockdown in the month of March for 21 days, which was extended later. There were so many changes seen around us, which we never witnessed even at the time of war. As the news of lockdown spread in the country people rushed to markets in order to hoard groceries. Video clips of China were viral where people were fighting in front of grocery stores. Vendors were selling bread, biscuit at inflated price to the common man. The supply chain of goods were broken due to complete lockdown due to which prices rose drastically and the entire economy came to a standstill.

Which of the following statements indicate a "Shift" in the demand of a commodity?

  • Demand for pepsi when price of coke increases.
  • Demand for mangoes when the price falls.
  • Poor quality of pulses due to increase in the income of buyer.
Options:

1 and 2

2 and 3

1 and 3

1, 2 and 3

Correct Answer:

1 and 3

Explanation:

The correct answer is option 3: 1 and 3

When there is change in the demand of a commodity due to change in factors other than the price is called as "Shift" of demand curve. Explanation:

  • Statement 1 (Demand for Pepsi when the price of Coke increases) indicates a shift in demand because Pepsi and Coke are substitute goods. When the price of Coke increases, people may switch to Pepsi, causing an increase in the demand for Pepsi, which is a shift in the demand curve.

  • Statement 2 (Demand for mangoes when the price falls) reflects a movement along the demand curve, not a shift. The demand curve does not shift here, as this is a change in quantity demanded due to a price change.

  • Statement 3 (Poor quality of pulses due to increase in the income of buyer) indicates a shift in demand because if a buyer’s income increases, they may stop buying poor-quality pulses and demand better-quality alternatives. This reflects a shift in demand based on income changes.