Advertisements
Advertisements
Question
What do you mean by an ‘inferior good’? Give some examples.
Advertisements
Solution
Inferior good: Those goods that share an inverse relationship with their prices and with the income of a consumer are called inferior goods. That is,
If the price of a good (Px) increases, then thedemand for good (Dx) decreases.
If a consumer’s income (M) increases, then the demand for good (Dx) decreases.
Examples: Coarse cereals, bidis etc.
RELATED QUESTIONS
The measure of price elasticity of demand of a normal good carries minus sign while price elasticity of supply carries plus sign. Explain why?
Price elasticity of demand of a good is (-) 1. Calculate the percentage change in price that will raise the demand from 20 units to 30 units.
Define or explain the following concept.
Unitary elastic demand.
State whether the following statement is True or False :
Concept of elasticity of demand is useful for finance minister.
What do you mean by substitutes? Give examples of two goods which are complements of each other.
Define or explain the following concept:
Unitary Elastic Demand
Give reason or explain the following statement:
Demand for necessaries is inelastic.
State whether the following statement is true or false. Give valid reasons in support of your answer.
Luxury goods often have lower price elasticity of demand.
Answer the following question.
When the price of X doubles, its quantity demanded falls by 60 percent. Calculate its price elasticity of demand. What should be the percentage change in price so that its quantity demanded doubles?
Arrange the following coefficients of price elasticity of demand in ascending order:
(−) 3.1, (−) 0.2, (−) 1.1
The concept of elasticity of demand was introduced by
Identify the correct pair of items from the following Columns I and II:
| Columns I | Columns II |
| (1) Perfectly elastic supply | (a) Es > 1 |
| (2) Perfectly inelastic supply | (b) Es < 1 |
| (3) Unitary elastic supply | (c) Es = 1 |
| (4) Relatively elastic supply | (d) Es = 0 |
State with reasons whether you agree or disagree with the following statement:
The elasticity of demand gets influenced by the nature of the commodity.
The price of a good decreases from ₹100 to 80 per unit. If the price elasticity of demand for the good is 2 and the original quantity demanded is 30 units, calculate the new quantity demanded.
The elasticity of demand for school bag will be ______.
When change in price is greater than the change in quantity demand it is a case of elastic demand.
What is meant by elastic demand?
Which type of good typically has inelastic demand?
