Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

If the price of onions will rise in future, what will happen to the current demand of the consumer?

Options:

he will buy more in present

he will buy less in present

price of onion will not affect his demand

price of onion will will be back to normal in future

Correct Answer:

he will buy more in present

Explanation:

The most important and the basic assumption of economics is "Rationality". Any rational consumer will try to get maximum benefit out of any transaction. So, if a person knows that the prices of onion are going to rise, he would act rationally and hoard certain amount for future use, when the prices are raised. Thus, we can say future rise in the price of onion will cause an increase in the demand for the same at the present times.