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Chapters
1: Microeconomics and Macroeconomics: Introduction
▶ 2: Demand and Law of Demand
3: Theory of Consumer Behaviour: Marginal Utility and Indifference Curve Analysis
4: Elasticity of Demand
5: Supply - Law of Supply and Price Elasticity of Supply
6: Market Mechanism: Equilibrium Price and Quantity in a Competitive Market
7: Laws of Returns - Returns to a Factor and Returns to Scale
8: Cost and Revenue Analysis
9: Forms of Market
10: Producer's Equilibrium
11: Determination of Equilibrium Price and Output Under Perfect Competition
SECTION 2: THEORY OF INCOME AND EMPLOYMENT
12: Theory of Income and Employment
SECTION 3: MONEY AND BANKING
13: Money: Meaning and Functions
14: Banks: Commercial Bank and Central Bank
SECTION 4: BALANCE OF PAYMENTS AND EXCHANGE RATE
15: Balance of Payments and Exchange Rate
SECTION 5: PUBLIC FINANCE
16: Fiscal Policy
17: Government Budget
SECTION 6: NATIONAL INCOME
18: National Income and Circular Flow of Income
19: National Income Aggregates
20: Methods of Measuring National Income
SECTION 7: PROJECT WORK
21: Project Work
22: Model Short Answer Questions
![Frank solutions for Economics [English] Class 12 ISC chapter 2 - Demand and Law of Demand - Shaalaa.com](/images/economics-english-class-12-isc_6:872f47036b5c4267ae061d4279703803.jpg "Frank solutions for Economics [English] Class 12 ISC chapter 2 - Demand and Law of Demand")
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Solutions for Chapter 2: Demand and Law of Demand
Below listed, you can find solutions for Chapter 2 of CISCE Frank for Economics [English] Class 12 ISC.
Frank solutions for Economics [English] Class 12 ISC 2 Demand and Law of Demand TEST YOURSELF QUESTIONS [Pages 25 - 31]
Select the correct option for each of the following questions:
The amount of the goods that the consumers actually purchase during a specific period is called ______.
intended demand
ex ante demand
unplanned demand
ex post demand
Demand for goods that have multiple uses is called ______.
composite demand
joint demand
derived demand
none of these
The functional relationship between the demand for a commodity and the level of income is known as ______.
price demand
derived demand
joint demand
income demand
Those goods the demand for which falls with increase in income and increases with fall in income of the consumer are called ______.
normal goods
inferior goods
necessities of life
luxurious
As the price of a good (coffee) falls, the demand for its substitute good (tea) will ______.
increase
decrease
remains unchanged
none of these
If the price of a good (petrol) increases, the demand for its complementary good (cars) will ______.
decrease
increase
unaffected
none of these
The law of demand states that with a fall in the price of a good, there is ______.
decrease in the quantity demanded
increase in the quantity demanded
increase in demand
decrease in demand
Inverse relationship between the price of a commodity and the quantity demand (negative slope of the demand curve) can be explained in terms of ______.
income effect
substitution effect
the sum total of income effect and substitution effect
none of these
Giffin goods are ______.
normal goods, whose demand falls with a rise in their prices
inferior goods, whose demand falls with increase in the income of the consumer
inferior goods, whose demand falls with a fall in their price
superior goods, whose demand falls with a fall in income
A downward movement along a demand curve is called ______.
contraction of demand
expansion of demand
decrease in demand
increase in demand
Increase in demand is shown by the demand curve when ______.
the demand curve shifts to the right
the demand curve shifts to the left
upward movement along the given demand curve
downward movement along the given demand curve
Which of the given options for a reason of decrease in demand (leftward shift of the demand curve)
rise in the own price
increase in the price of substitute goods
increase in the price of complementary goods
increase in income
In case of normal goods, the demand curve is ______.
downward sloping
upward sloping
horizontal
vertical straight
In case of substitute goods the demand for a good usually move in the ______ direction of the price of its substitutes.
opposite
same
random
none of these
Coarse cereal is a type of ______.
superior good
inferior good
Giffen good
normal good
Contraction of demand refers to ______.
downward movement along a demand curve
upward movement along a demand curve
shift in the demand curve
none of these
"Market demand curve is constructed by horizontally summing all the individual's demand curves at each and every price." Choose the correct option for the above-mentioned statement.
True
False
Partially true
Can't be determined.
If the price of good X rises and it leads to an increase in demand for good Y, both are ______ goods.
Substitutes
Complementary
Normal
Inferior
There is a decrease in demand when there is ______.
fall in demand with decrease in price
fall in demand with same price
fall in demand with increase in price
none of these
Law of demand states the ______ relationship between price and quantity demanded.
Inverse
Positive
Proportional
None of these
Increase in the price of brand Tata tea leads to ______ in the demand for Lipton tea:
expansion in demand
increase in demand
decrease in demand
contraction in demand
The effect of a change in price of commodity X on the demand for commodity Y is known as ______.
income effect
price effect
cross price effect
none of these
From the following statements given in Column I and Column II, choose the correct pair of statements.
| Column I | Column II |
| A. Movement along the demand curve | 1. Change in demand |
| B. Shift in demand curve | 2. Change in quantity demanded |
| C. Normal goods | 3. Negative income effect |
| D. Inferior goods | 4. Positive income effect |
A - 3, B - 4, C - 2, D - 1
A - 3, B - 1, C - 4, D - 2
A - 4, B - 2, C - 3, D - 1
A - 2, B - 1, C - 4, D - 3
During the Diwali season, the demand for sweets increases even when the price remains the same. How will this affect the demand curve of sweets?
The demand curve will shift towards the right.
The demand curve will shift towards the left.
There will be upward movement on the demand curve.
There will be downward movement on the demand curve.
Which one of the following is a reason behind an upward sloping demand curve?
Substitution effect
Income effect
Conspicuous consumption
Law of diminishing marginal utility
Given below are two statements marked as Assertion (A) and Reason (R). Read the statements carefully and choose the correct option.
Assertion (A): Demand curve shows the inverse relation between the own price of a good and its quantity demanded.
Reason (R): Law of diminishing marginal utility which advocates that the consumer gets lesser satisfaction from each additional unit of a good consumed.
Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true, but Reason (R) is false.
Assertion (A) is false, but Reason (R) is true.
Very Short Answer Questions
What is meant by an economic good?
Define the following concept:
Demand
Define individual demand.
Define market demand.
Milk is used for making curd, sweets and chocolates.
What type of demand does milk have? Give a reason.
What is joint demand.
Give two examples of joint demand.
What is meant by ex-ante demand?
What is meant by ex-post demand?
Mention any two determinants of demand for a commodity other than its price.
What determines the level of household consumption?
Define Substitute goods.
Define complementary goods.
What are inferior goods?
Define Giffen goods.
Define Normal goods
When is a good called an inferior good?
What do you mean by a normal good?
Give two examples of a pair of commodities that are substitutes.
Give two examples of a pair of commodities that are complementary to each other.
Give two examples of normal goods.
Give two examples of inferior goods.
How will an increase in price of tea affect the demand for coffee?
How will an increase in price of tea affect the demand for sugar?
How does an increase in income affect the demand for an inferior good?
Explain with an example what kind of a commodity will have an inverse relationship between income and demand.
If the demand for good Y increases as the price of another good rises, how are the two goods related?
If the demand for good Y decreases as the price of another good rises, how are the two goods related?
What happens to the demand for a substitute good of a commodity when its price falls?
If the quantity demanded of a commodity X decreases as the household income increases, what type of good is X?
What is a demand function?
What is meant by price demand.
Give the meaning of Income demand.
Give the meaning of Cross demand.
What is meant by cross price effect? Give two examples to illustrate it.
State the law of demand.
State two factors which determine the demand for a product.
What is a demand schedule?
What do you mean by Demand curve?
What is the shape of a demand curve?
OR
How does an increase in the price of a commodity affect the quantity demanded? Explain it with the help of a diagram.
What is the income effect of a change in the price of a good?
Define substitution effect.
Define income effect.
What is the substitution effect?
Give two exceptions to the law of demand.
What is increase in demand?
What is decrease in demand?
What is an expansion of demand?
What is contraction in demand?
When would a demand curve shift rightwards?
When would a demand curve shift leftwards?
What do you understand by Movement along the demand curve?
What do you understand by Shift of demand curve?
Give a reason for the following:
The demand for a good increases when income of the consumer increases.
Give a reason for the following:
X and Y are substitute goods. A rise in price of X results in a rightward shift of the demand curve of Y.
Short Answer Questions (3 marks each)
How do changes in income of the household affect his demand for a commodity?
OR
Discuss the relationship between income of the consumer and demand for a commodity with respect to normal goods.
Discuss the relationship between income of the consumer and demand for a commodity with respect to inferior goods.
Discuss the relationship between income of the consumer and demand for a commodity with respect to necessities.
Distinguish between normal goods and inferior goods, with examples.
Differentiate between Giffen goods and inferior goods.
Distinguish between substitution goods and complementary goods with examples.
Explain what will happen to the demand for a commodity if the price of its substitution goods falls.
Explain what will happen to the demand for a commodity if the price of its complements falls.
OR
How does the change in the price of related goods affect the demand of a commodity? Explain.
Explain with the help of diagrams the effect of the following changes on the demand of a commodity:
A fall in price of a complementary good
Explain with the help of diagrams the effect of the following changes on the demand of a commodity:
A fall in the income of the buyer
Explain with the help of diagram the effect of the following changes on the demand for a commodity:
A rise in price of substitute goods
Explain with the help of diagrams the effect of the following changes on the demand for a commodity:
A favourable change in the taste of the buyers of the commodity
Explain any three determinants of demand for a commodity by a household.
OR
Explain two factors affecting the demand for a commodity other than its price.
State the law of demand and illustrate it diagrammatically.
Explain why the demand curve slopes downwards.
Explain why the demand curve slopes downwards.
How is law of demand related to law of diminishing marginal utility?
Explain how the following phenomena is an exception to the law of demand
Expectations about future prices.
Explain how the following phenomena is an exception to the law of demand:
Conspicuous consumption by a consumer.
Explain the income effect of a fall in the price of a commodity on its demand.
Explain the substitution effects of a fall in the price of a commodity on its demand.
OR
Explain how income effect is the reasons for the downward slip of the demand curve?
Explain how substitution effect is the reasons for the downward slip of the demand curve?
Explain the situations in which the demand curve slopes upward from left to right.
Differentiate between the expansion of demand and an increase in demand, using diagrams.
Differentiate between decrease in demand and contraction of demand.
Explain the shift of the demand curve and compare it with the movement along the demand curve with the help of diagrams.
Discuss with the help of a diagram the concept of increase of demand.
Discuss with the help of diagram the concept of extension of demand.
Differentiate between a change in quantity demanded and a change in demand.
Explain briefly any three factors which lead to rightward shift of a demand curve.
Give three reasons which lead to increase in demand of commodity.
Explain any three factors which lead to leftward shift of a demand curve.
Explain any three factors which lead to leftward shift of a demand curve.
Long Answer Questions (6 marks each)
Define the following concept:
Demand
Name the factors determining market demand
Explain briefly the factors which influence individual demand for a commodity.
Explain two factors affecting the demand for a commodity other than its price.
Explain the reasons for the inverse relationship between the price of a commodity and the quantity demanded of it.
Explain the law of demand.
Explain the exceptions to the law of demand.
Explain the law of demand.
Explain the law of demand with its assumptions.
Explain the exceptions to the law of demand.
What do you mean by Demand curve?
Why does a demand curve slope downward from left to right?
Market demand curve is a horizontal summation of individual demand curves. Explain diagrammatically.
Thinking Beyond...
Write an equation to the linear demand function.
Derive a demand curve from the demand function Qd = 20 − 4 P.
All Giffen goods are inferior goods, but all inferior goods are not Giffen goods. Explain.
Solutions for 2: Demand and Law of Demand
Frank solutions for Economics [English] Class 12 ISC chapter 2 - Demand and Law of Demand
Shaalaa.com has the CISCE Mathematics Economics [English] Class 12 ISC CISCE solutions in a manner that help students grasp basic concepts better and faster. The detailed, step-by-step solutions will help you understand the concepts better and clarify any confusion. Frank solutions for Mathematics Economics [English] Class 12 ISC CISCE 2 (Demand and Law of Demand) include all questions with answers and detailed explanations. This will clear students' doubts about questions and improve their application skills while preparing for board exams.
Further, we at Shaalaa.com provide such solutions so students can prepare for written exams. Frank textbook solutions can be a core help for self-study and provide excellent self-help guidance for students.
Concepts covered in Economics [English] Class 12 ISC chapter 2 Demand and Law of Demand are Microeconomics, Macroeconomics Vs Microeconomics, Macroeconomics, Meaning of Demand, Features of Demand, Types of Demand, Determinants of Demand, Demand Function, Quantity Demanded and Demand, Introduction to Microeconomics and Macroeconomics, Introduction to Demand, Law of Demand, Demand Schedule, Demand Curve, Linear Demand Curve, Reasons for the Downward Slope of the Demand Curve, Importance of the Law of Demand, Exceptions to the Law of Demand, Movement Along the Demand Curve, Change in Demand – Shift in Demand Curve, Difference Between Extension and Increase in Demand, Individual Demand Curve to Market Demand Curve, Difference Between Contraction and Decrease in Demand, Cross Price Effects, Relationship Between Income and Demand, Impact of Tastes and Preferences on Demand for a Commodity, Industry Demand Vs Firm Demand, Slope of the Demand Curve, Concept of Utility, Cardinal Utility Analysis / Marginal Utility Analysis, Types of Marginal Utility, Total Utility and Marginal Utility, Forms of Utility, Features of Utility, Relationship Between Total Utility and Marginal Utility, Law of Diminishing Marginal Utility, Consumer's Equilibrium through Cardinal Utility Approach, Exceptions of the Law of Diminishing Marginal Utility, Importance of the Law of Diminishing Marginal Utility, Law of Equi-Marginal Utility, Exceptions of the Law of Equi-marginal Utility, Importance of the Law of Equi-marginal Utility, Consumer's Equilibrium through Indifference Curve Approach, Indifference Curve, Indifference Map, Marginal Rate of Substitution (MRS), Assumptions of Indifference Curve Analysis, Properties of Indifference Curves, Price Line or Budget Line, Consumer's Equilibrium through Indifference Curve Approach, Comparison of Utility Theory and Indifference Curve Theory, Ordinal Utility Analysis/Indifference Curve Analysis, Indifference Schedule, Relationship Between Marginal Rate of Substitution and Marginal Utility.
Using Frank Economics [English] Class 12 ISC solutions Demand and Law of Demand exercise by students is an easy way to prepare for the exams, as they involve solutions arranged chapter-wise and also page-wise. The questions involved in Frank Solutions are essential questions that can be asked in the final exam. Maximum CISCE Economics [English] Class 12 ISC students prefer Frank Textbook Solutions to score more in exams.
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