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Question
Explain the following diagram with reference to the concept of Giffen goods.
The demand curve can slope upwards from left to right. Give one argument in support of this statement.
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Solution
Giffen products are inferior items whose demand increases as the price of a good rises. This is an exception to the Law of Demand.
For example, a commodity such as jowar is a requirement for poor people. When its price rises. Consumers are obliged to reduce their use of other items such as milk and meat, and since jowar is the cheapest, they will buy and consume more of it.
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State with reason whether you agree or disagree with the following statement:
When the prices of Giffen goods falls, demand for such goods rises.
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State with reason whether you agree or disagree with the following statements:
When price of Giffen goods fall, the demand for it increases.
State with reasons whether you agree or disagree with the following statements :
When price of Giffen goods fall, the demand for it increases.
'Price is an indicator of quality'. The statement applies to ______.
When price of Giffen goods fall, the demand for it increases.
State with reason whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
State two circumstances under which the demand curve slopes upwards to the right.
Which of the following best describes a Giffen good?
