Question

Match the following: Group A 1. Demand and price 2. Tea and coffee 3. Inferior goods 4. Factors of production 5. Pen and ink Group B a. Substitute goods b. Inverse relation c. Joint demand d. Distribution of income e. Composite demand f. Giffen goods g. Indirect demand

Answer 1

The correctly matched pair is as follows:

1. Demand and price - b. Inverse relation.

Demand and price is considered as inverse relation because, when one rises the other falls and vice versa.

2. Tea and coffee - a. Substitute goods.

The goods substitutes one with another are called as substitute goods. Tea and coffee are examples of such type of goods.

3. Inferior goods - f. Giffen goods.

Giffen good is an uncommon kind of inferior goods whose request increase as the cost of the goods hikes.

4. Factors of production - g. Indirect demand.

The production factor rely mainly on demand. Goods are produced as a result of demand and in some cases the produced goods are used as raw materials for other goods.

5. Pen and ink - c. Joint demand.

When two goods are in demand for single purpose they are called as Joint demand. Pen and ink are joint demand for writing purpose.