Match the following: 1. The dema

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Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Match the following:

1.	The demand of car decreased due to rise in its price	A.	Extension of demand
2.	The demand for iPhone reduced due to fall in the income of individual	B.	Contraction of demand
3.	The demand of pen increased due to fall in its price	C.	Increase in demand
4.	The demand for apparel increased due to favourable shift in tastes	D.	Decrease in demand

Options:

1-D, 2-B , 3-C, 4-A

1-D, 2-B , 3-A, 4-C

1-B, 2-D , 3-A, 4-C

1-C, 2-D , 3-A, 4-B

Correct Answer:

1-B, 2-D , 3-A, 4-C

Explanation:

Changes in the demand of a commodity can be categorised into 2 categories:

Shift in the demand curve: When change in the demand is due to change in factors other than the own price of commodity.
Movement along the demand curve: When change in demand is due to change in the own price of the commodity.

Shift in the demand has two types:

Increase in demand: When demand rises due to change in other factors like increase in income, favourable shift in tastes etc.
Decrease in demand: When demand falls due to change in other factors like decrease in income, unfavourable shift in tastes etc.

Movement along the demand curve has two types:

Extension of demand: When demand rises due to fall in the own price of the commodity
Contraction of demand: When demand falls due to rise in the own price of the commodity