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Question
State with reason whether you agree or disagree with the following statement:
When the prices of Giffen goods falls, demand for such goods rises.
Options
Agree
Disagree
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Solution
I disagree with the given statement.
Reason:
- Giffen Goods are inferior or low-quality goods like vanaspati ghee (Dalda), low quality rice etc.
- Sir Robert Giffen observed a behaviour related to bread (inferior good) in England.
- People had limited money. Therefore, they used to consume more bread (inferior and cheaper commodity) and less meat (a costlier commodity).
- He observed that when price of bread decreased, less bread was demanded than before.
- The people saved money and used it to purchase meat and thus, the demand for meat increased.
- This behaviour is called as “Giffen’s paradox”.
- This happens because every person wants to constantly increase his standard of living.
- There is a direct relationship between price & quantity demanded in case of Giffen goods.
Therefore, when price of Giffen goods fall, the demand for it also falls.
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State with reasons whether you agree or disagree with the following statement:
There is a direct relationship between the price of Giffen goods and its demand.
State with reason whether you agree or disagree with the following statement.
When price of Giffen goods fall, the demand for it increases.
State with reasons whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
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 reason whether you agree or disagree with the following statement:
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.
In which exception to the law of demand does the consumer equate price and quality.
“The inverse relationship between price and quantity demanded does not hold good in many cases.”
- Justify the above as Yes or No.
- If justified, explain in brief the Giffen Effect.
State with reasons whether you agree or disagree with the following statement:
When price of Giffen goods fall, the demand for it increases.
Mention one exception to the law of demand. Give one point only.
What is contraction in demand?
State two circumstances under which the demand curve slopes upwards to the right.
Give one point each of similarity and dissimilarity between Giffen goods and Veblen goods.
What are Giffen goods?
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.
Why are prestige good an exception to the law of demand?
Which of the following best describes a Giffen good?
Why do people buy more luxury goods when prices go up, defying the usual law of demand?
Which exception to the law of demand is primarily based on consumer beliefs about product quality?
What happens to the demand for necessities like salt or electricity when their prices increase?
Which situation is an example of speculation affecting demand?
