Which one of the following may lead to movement along the demand curve of a commodity?
- A.Change in its price
- B.Change in price of the other commodities
- C.Change in income of the consumer
- D.Change in tastes and preferences of consumers
Correct answer
Explanation
The correct answer is A, Change in its price. A change in a good's own price, with everything else fixed, moves the buyer up or down the same demand curve.
A demand curve shows how much of a good people will buy at each of its prices, holding all other factors constant. When only the good's own price changes, we move to another point on the same curve; economists call this an extension of demand when price falls and a contraction when it rises. When any other factor changes, such as income, the prices of related goods, tastes or expectations, the whole curve shifts to the right or the left. This is called an increase or a decrease in demand.
B is wrong because a change in the price of a substitute or complement shifts the curve. C is wrong because a change in income also shifts the whole curve. D is wrong because a change in tastes and preferences shifts the curve as well.
Exam tip: Own price changes: movement along the curve (extension or contraction); any other factor: shift of the curve (increase or decrease).
Practice Questions
View allWhich one among the following plans is also known as Mahalanobis Plan ?
- A.First Five Year Plan
- B.Second Five Year Plan
- C.Third Five Year Plan
- D.Sixth Five Year Plan
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The Second Five Year Plan (1956–61) was built on a growth model prepared by the statistician P. C. Mahalanobis, so it is called the Mahalanobis Plan.
Read the full explanation →The Reserve Bank of India defines narrow money as
- A.CU (currency notes + coins) + DD (net demand deposits held by commercial banks)
- B.CU + DD + saving deposits with post office savings banks
- C.CU + DD + net time deposits of commercial banks
- D.CU + DD + net time deposits of commercial banks + total deposits of post offices
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Narrow money, M1, is currency held by the public plus net demand deposits with commercial banks, the most liquid forms of money.
Read the full explanation →In National Income (NI) accounts, Personal Income (PI) is defined as
- A.NI - undistributed profits - net interest payments made by households - corporate tax + transfer payments to the households from the government and firms
- B.NI - undistributed profits - corporate tax + transfer payments to the households from the government and firms
- C.undistributed profits - net interest payments made by households + transfer payments to the households from the government and firms
- D.undistributed profits - net interest payments made by households - corporate tax
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Personal Income is the part of National Income that actually reaches households, plus the transfers they receive. National Income counts all factor incomes earned in the economy, but not all of it is paid out to people.
Read the full explanation →The Khushkhera-Bhiwadi-Neemrana Investment Region is a node of the Delhi Mumbai Industrial Corridor in which state?
- A.Haryana
- B.Rajasthan
- C.Uttar Pradesh
- D.Gujarat
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Khushkhera, Bhiwadi and Neemrana lie in the Alwar and Khairthal-Tijara belt of north-eastern Rajasthan, close to the Delhi border and on the Delhi-Jaipur highway, and the region is already a cluster of automobile ancillary, electronics and Japanese-owned units.
Read the full explanation →The Vikram Udyogpuri integrated industrial township, a node of the Delhi Mumbai Industrial Corridor, lies near which city?
- A.Indore
- B.Ujjain
- C.Bhopal
- D.Jabalpur
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Vikram Udyogpuri is an integrated industrial township developed near Ujjain in Madhya Pradesh as one of the state's two nodes in the Delhi Mumbai Industrial Corridor.
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