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Home Questions B5FFQRUEU2
Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Match List- I with List-II.

List-I List-II
(A) Upward movement along demand curve (I) Ceteris paribus
(B) Downward movement along demand curve (II) Contraction in Demand
(C) Law of demand (III) Horizontal summation of individual demand
(D) Market demand (IV) Expansion in demand

Choose the correct answer from the options given below :

Options:

(A)-(I), (B)-(II), (C)-(III), (D)-(IV)

(A)-(II), (B)-(IV), (C)-(I), (D)-(III)

(A)-(III), (B)-(II), (C)-(I), (D)-(IV)

(A)-(IV), (B)-(I), (C)-(II), (D)-(III)

Correct Answer:

(A)-(II), (B)-(IV), (C)-(I), (D)-(III)

Explanation:

The correct answer is option (2) : (A)-(II), (B)-(IV), (C)-(I), (D)-(III)

The demand curve graphically represents the relationship between the demand for a commodity and the price of that product at any given period. In addition, demand curves are frequently paired with supply curves to estimate the market’s equilibrium price and quantity. In a graph, the vertical axis (Y-axis) represents the price of the commodity, while the horizontal axis represents the amount demanded (X-axis). The price of a commodity and its demand have an inverse relationship. This indicates that as the price of an item rises, so does its demand, and as the price falls, so does the demand. As a result, the demand curve in a graph has a downward slope.

The change in both factors, namely the price and quantity demanded, from one point to the next is depicted by movement along the demand curve. There are two forms of movement in a demand curve: extension and contraction. When the demand for a commodity rises due to a decrease in price, the demand curve extends. A contraction in the demand curve occurs when the demand for a commodity diminishes due to a price increase.

  • Upward Movement indicates a decrease in demand, i.e., a decrease in demand due to a price increase.

  • Downward Movement indicates an increase in demand, i.e., demand for the product or service rises as prices decrease.

(A) Upward movement along demand curve : This refers to an increase in quantity demanded due to a decrease in price, so it aligns with (II) Contraction in demand.

(B) Downward movement along demand curve : This corresponds to a decrease in quantity demanded due to an increase in price, so it matches with (IV) Expansion in Demand.

(C) Law of demand : The law of demand states that, all else being equal (ceteris paribus), as the price of a good or service increases, the quantity demanded decreases. So, it's associated with (I) Ceteris paribus.

(D) Market demand : This involves the horizontal summation of individual demand curves, so it matches with (III) Horizontal summation of individual demand.

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