1.When is the demand of a commodity said to be inelastic?
2.What is budget constraint?
3.How market demand curve is derived with the help of individual demand curve?
4.Distinguish between Budget set and Budget line.
5.State any three situations in which law of demand does not operate?
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1. I assumed that you were talking about price elasticity. The demand of a commodity is said to be inelastic when percentage change in quantity demanded is less than percentage change in price that is, when you increase the price of the commodity goods by 1 percent, the quantity demanded decreases by less than 1 percent.
2.Budget line (Budget constrain) is the line that represent every possible combination of the 2 goods on the x-axis and y-axis that you can consume by spending all of your current budget.
3. Budget set is all the point that you can consume given your current income (the points on budget line are included)
4. 1.The good is a giffen goods. 2.snob or bandwagon effects occurs 3.The goods is a veblen goods.
2.Budget line (Budget constrain) is the line that represent every possible combination of the 2 goods on the x-axis and y-axis that you can consume by spending all of your current budget.
3. Budget set is all the point that you can consume given your current income (the points on budget line are included)
4. 1.The good is a giffen goods. 2.snob or bandwagon effects occurs 3.The goods is a veblen goods.
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