Question

Writ (T) for True and (F) for False Statements: All desires of human beings are known as ‘Demand’. Demand is inversely related with income of the consumer. Supply is the quantity which actually brought by the seller to sell in the market. The stock of perishable goods are similar to the supply quantity. Demand curve goes upward to the right, to show inverse relationship between price and demand for good. When the price of Giffen good increases, its’ demand also increases. Income demand means relationship between price and demand quantity. Size of population is also a determinant of demand. Individual demand means all quantity demanded by buyers in the market. Means and willingness are necessary factors to be demand. Fill in the Blanks by Suitable word Two major wheels of the economy are …….. and ……. …. … …. is the desire from sellers side. The major determinant of demand is … … The situations when law of demand is not applicable is known as its …. ….. Beggar’s desire is not regarded as demand, because he may not have … …. When price of one good affects to the demand for other good, this situation is known as … …. Demand is the effective desire backed by …. ….. and ……….. When price of a good increases, its demand …. ….. but the supply …… ….. Those goods, which can be consumed alternatively are termed as …. …… goods. ….… are those goods, whose demand rises when income the consumer decreases.

Answer 1

Answer: (1) F, (2) F, (3) T, (4) F, (5) F, (6) T, (7) F, (8) T, (9) F, (10) T

Please check Explanation below for answers to section 2

Explanation: All desires of human beings are known as demand is False.

(1) Demand is the quantity of goods and services that a consumer is "willing" and "able" to buy at a "given price" and at a "particular point in time." Therefore, that someone desires a beautiful house does not constitute demand, but certain conditions must be present and one of such is his ability (that is money) to buy the house.

(2) Demand is inversely related with the income of the consumer is False.

On the contrary, demand is directly related with the income of the consumer, that is, both variables move in the same direction. Simply put, as the income of the consumer rises, his total demand for a commodity or service will also rise, and likewise if the income of a consumer falls, hos total demand for a commodity will also fall or reduce.

(3) Supply is the quantity which is actually brought by the seller to sell in the market is True.

This is the simplest way to put the definition of supply which is defined as the quantity of a commodity that a seller is willing to sell at a given price and at a given point in time.

(4) The stock of perishable goods are similar to the supply quantity is False.

The supply quantity includes the entire stock of goods that the seller or producer is willing to sell regardless of its status (perishable or not).

(5) Demand curve goes upward to the right, to show inverse relationship between price and demand for good is False.

Demand curve actually slopes downward to the right, and this shows an inverse relationship between quantity demanded and price of a commodity. That means, as the demand increases the price reduces, and as the price increases the demand reduces. This follows the law of demand which states that, "other factors being held equal, the higher the price the lower the quantity demanded and, the lower the price the higher the quantity demanded."

(6) When the price of Giffen goods increases, its demand also increases is True.

Giffen goods also known as inferior goods (or staple foods most often) are such that the consumers of such goods usually do not have better alternatives. Hence as the prices of such goods rise the consumer demands equally rise (contrary to the law of demand).

(7) Income elasticity of demand means relationship between price and demand quantity is False.

Income elasticity of demand is the relationship between the consumer income and the quantity demanded, and it measures the rate of response of the quantity demanded in relation to the rate of change in income.

(8) Size of population is also a determinant of demand is True.

The determinants or factors of demand are those that affect the level of demand, and when the population increases the level of quantity demanded will also increase, and vice versa.

(9) Individual demand means all quantity demanded by buyers in the market is False.

Individual demand is clearly distinct from market demand. Market demand is the totality of all the individual demands for a commodity.

(10) Means and willingness are necessary factors to have demand is True.

 Just as explained in number (1) above, demand can only be effective if there is the means (money/resources) and the willingness to make a purchase. If these two conditions are not met, then desire for a commodity alone cannot be termed as demand.

Fill in the blanks by suitable words;

Two major wheels of the economy are Demand and Supply, Supply is the desire from sellers side. The major determinant of demand is Price. The situation when law of demand is not applicable is known as Abnormal demand. Beggar's desire is not regarded as demand, because he may not have ability. When price of one good affects the demand for another good, this situation is known as Substitute goods. Demand is the effective desire backed by Ability and willingness. When price of a good increases, its demand decreases but the supply increases. Those goods which can be consumed alternatively are termed as substitute goods. Inferior or Giffen goods are those good whose demand rises when the income of the consumer decreases.