AL UNIT-1 ~ It is a(gten wih provides people the means to and earn a a St whidh has Uonomic Huletion with otfcr Cowomies . (ee hich has NO Cowormicrulation with other emwowe es BN wy Ha is yk dean snc ae i supply Ws + Eequowerrone isthe I A due to- 7a Resounes ave Limited v. Repouus hue altemative User. c Human Wants ave unimited 174, ECONOMISNG OF RESOURCES - It means allocating the limited resources in such aa —_ 7 7 » . > BR ha a isa derand 4 Gesocread ham is supely m > eeguoMcron is se IRS A ss due to- a. Resouhits are Limited b. Resoukus have attemabive Wes c Human Wants ave unlimited \s GUECONMGING GF RESOURER -1t means allocating the limited resources in sucha way that economy produces maximum ots and es i.e. effective and efficient use of resources. 3), REASONS /AUSES OF ECONOMIC PROBLEM. F 1 Limited Resources: - Problem 4 allocation of Aesourus arse becouse HUbourels OK te Achshy th & wey wank of in divi dial .\}, REASONS / CAUSES OF ECONOMIC PROBLEM F 1. Limited Resources: - Problem of allouadion of souus arise because Jusourns On a Aah shy th & wey wont in divi dtd . we 2. Resources Have Alternative Uses: - Resoures hgwe alternative wses ie when an Individual drooses one option then qusoude will wot he aanilable fr olur Uses. &- LAND @ Unlimited Human Wants:- Wuwan wank ave unlimited 2 it Is a : iter Aad sfachion 4 one aut amotturY whak avises = ee x: - ECONOMICS 3sanother’ whk awses- x x 2 % Micro economics deals with 1. It deals with the economic units. a "naa oa ona 2. The main tools are BBBRegEe and supply. demand and SGBfega supply. /3- Micro economics is also known as 3, Itisalsoknownas_jyCoME + PRICE THEORY . EMPLOYMENT THEORY 'A- Micro economics is concerned with| 4. It is concerned with determination | price determination}by a firm. of (priges for the economy) as a e - whole. | 4x. £8, Price of a product.” 5._E.g General price level." Stud Tees Stud Forest DOWNLOAD RKG INSTITUTE APP & RKG CA CLASSES APP | 9650719104 | www.rkginstitute.com | we** sey C Thang ) 1. In this economy all the means of yoni toa are owned by_ PRIVATE SecToR . \@ 2. In this economy, central problems are shed ke mths market forces of deman¢ forces of demand and supply 3. Capikalut ep mi Knol Market Cuoweniy “7 ) 1. In this economy, all the means of production are owned by GOVERN MENT 2. In this economy all the central roblem are A aan 3. Souialixt ciel in alto Kwaion a > % (CENTRAL PROBLEM OF AN ECONOMY. v vinp((oo7,)L l J KK CENTRAL PROBLEM OF AN ECONOMY, Vv (eo) () he problem of what to produce is essentially a problem of choice regarding(which goods|should be produced and{in what quantities|by an economy. “tis. toworny has to devide toteich will be wed, isu de (Milk de) Yow capita nods (Masui eke). The Ge has b 05 € ties i im mink dl Yeds of the perple ond "4 « Susouls in Auk a that it ‘20 HoW!to|Prodiicé: The problem of how to produce is essentially a problem of choice Y ii regarding technique of production. Thus an twe teunna 7 an a) Labour Intew ive techwique b) ita bewive tech wigue | Tao Llnoo (Fernie mils)‘(20 HOWIROIPFOdUEE: The problem of how to produce is essentially a problem of choice 4 “regarding technique of production. OM wwe tedawagqaes ad “Al a) Labour tntewive technique b) pital lukewsive techwique. > the ig selected, Wha dy wre Dwrourus ow 2 50000105" 4 oy’ £0,500 Ddeys3 foewtom Bois problem refers to the selection of a category of people “ who wil ultimately consume the goods ie. whether to produce for the consumer. We Kwow thot te 0 udput in om une Is ty Juul umbined de various pilin Heng , Ana Wd be fh Td Quovy sua t to Qulprdivg he oflXK: \el on BRODUCTIONPOSSIBIUTYERONTIER! (P+ ') ok Tamstiaran Cotve Za Murs aie) shich epics RS RIE ABNBTONTFLWOBOR whch an economy can in 9 with given resources and technology. Os The avai lab il (i) os b Ww (iil) Atouus ake py OF Pre) the Manaus axe age (Moc): It is sth one goods (say ii) sacrificed to produce one more unit of another good (say yebisa). ae x MARGINALRATE OF TRANSFORMATION (Rs dtd aratiobt one good sacrificed eal nb athncnanit’ aNWr) ta Manus ave af (MOC): It is the(@mount)of one goods (say i) sacrificed to produce one more unit of another good (say asses a). p3~ aq [MARGINALRATE OFTRANSFORMATION (MRT: ts defined rato one good sacrificed for production of one additional unit of other good. -((™) MRT= Agoods sacrificed Agoods produced a: change CHoTs &) DOWNLOAD RKG INSTITUTE APP & RKG CA CLASSES APP | 9650719104 | www.rkginstitute.com | HiPPC is a @OWAWaraSlOping curve from left to right. {tis EOIGHUA to the origin because of increasing MOC. PPC can shift to the right or to the left. ‘SHIFT IN PPC (GOYURIBREWaEU Shite PP shift rightward due to - Discovery of new natural resources ie (Wcrease in natural resources) - (Advancement in technology) Grok’ ‘> Increase in labour through population growth. nnn (8 38 { | trhoduction =. Bele bethay pean » duvdopnuwt +b ong 3°, PPC shifts leftwards due to - sae 4 Wyrtunral, ALsOUALLB Flook, rth quale’) * abet tena > Derure In popalaion y “SLL Beller beat” er wa a ° 15 18 GoodX o 12.151. When(§BChiiolog) is efficient for good x) keeping the technology constant for good y, then PPC rotates from aq to aqi as this will increase productivity of x. Diagram 4 # 2. When ERB: eFicemor commodity , keeping the technology constant for good x, then PPC rotates from aq to aiq as this will raise the productivity of y. - Diaryam 2 x— x x x —— x x — « ——x ——x 3% (OPPORTUNITY COST is the cost of next best alternative “ul A Gvem pice se . poducion de, wal aad Paes & E 400 suppedivedy . mde "its p + produ _y ie YoleatL Qt How PPC is fected by “un eomployint eegood x, then PPC rotates from aq to aiq as ths will raise the productivity of y. — Diagram x— ic cican x——x x OPPORTUNITY COST is the cost of next best alternative foregone. ven pice \ pedution = Gaia! : “cha rh ie Lo | Pie fe seed ee aed Hu. vast 4 wert lust alkemadive fovegre € ek O-Y1 LAA =) is, was, will be ought to, shouldis, was, will be ought to, should 12 ‘When prices| fall, people often delay their purchases. Can be proved Connects cause Makes recommendations & effects Not based on facts Descriptive Tells you should be/have Based on facts been(is) comwescantnwooeie 0 It is The power ov Capauty Lt lewrmodity ‘o sabfy Warman Warts «Te is measuted in ories | MARGOT tis the (additional uhlity derived, fom Wrvoungtion of ome additiowel wat of a lowmndity. MU, = TUS - TU ** My ATV » change iw TU A units chayge in unitscomasaniminnonne iene It is mi ower 6¥ opeuly a WM ru fy Warman dot It is wt dL (UMARGWACUTUT. It is te (Sao) ded fom wrounpton af OMe additiousl unt of a lorwandity Mv, = TU, - TU ATV » chawye mm TU A units change in unite ** MUMEME ig a (Ado ub) davived fom Wrvunption of ome addition unit of Lowwnndit MY, = TU - Ty, ** My ATV » change iw TU A units chavs in unite It is tha sum of all the utilities\derived from consumption of certain number of units of a particular commodity. TU MU, MU, MUZMU,i ---— MU N7 mM Loy yey y A units chavs in unite It is the sum of all the utilities\derived from consumption of certain number of units of a particular commodity. TO = MU, MU, MUM Uy ---- MU, 1. Utility is measurable and| 1. Utility is a ps Quaw le concept. concept. | 2. Utility is expressed nuaneraly in| 2. Expressed in terms of RANK ie. jo utils consumergiveshispefrene” ® 3._Given by pro Alfred marshal 3._Given by prot Res STITU=== * remy [(DMU) OR FUNDAMENTAL LAW OF SATISFACTION OR LOMU Law: This law states that a8 Wade + wave Units fo lowmuadi towered, Han THe!© (3m) - Utility can be measured in quantitative terms - Itisassumed that consumption isa ie. consumer is rational and (Gis at ann tt en x Seen = It is & bihudhon Urder Uobidh Hu lonsumnen r i Iwome in Auch @ way Hak he I ypproach satisfaction. k Utility Approach (cardinal) (By Alfred Marshal) . (i) commoditywet Ls se It is & Aihudion wrder lolidh Hu lonsimes ‘ool & A i tupme in Auch a wag tua he {* Gk approaches: Utility Approach (cardinal (By Alfred Marshal) i) (Single) Indifference curve approach (ordinal) (by JR. Hicks) mumrmons) (H's) 0 sca Utility can be measured —~ Consumer is rational — —. AlurwrymrenonGy) (Coals) © pone - Utility can be measured —~ - Consumer is rational ~~ : of the commodity is given . of the consumer is given SINGLE COMMODITY: *% Equilibrium ConditionSINGLE COMMODITY: % Equilibrium Condition | ‘MU in terms of money (MU,) = Price of commodity ie, MU 4 peduct . Puce MU 4 Rupee jy) MUx = Py qt as - ee ee Gener waeWHY MUm = Px IS THE EQUILIBRIUM CONDITION? 1 Before point E, which signifies that consumer is willing to pay more than what he actually pays. So he will consume more of good X. 2. After point £, MUm < Px, signifies that consumer is willing to pay less than what he actually pays, so he will reduce the consumption of good X. 3. Conclusion - From the above two points we infer equilibrium is struck at point E when the price consumer is willing to pay is exactly equal to the price he actually pays. 1 Ni) MERE cocoons » » ve 7 Canciumar annilihriim dafinitinn — SANAE (6 Marks) = loo,Losses O 4. 2 3 4 5S 6 witsG Consumer equilibrium definition ~ SANE 1334 7ger ® sesumpion-SE ps ay (3) Consumer’ emir conitions A oO @- 2M (Law of Diminishing Marginal Utility\must prevail ifQausdPx > us/P), Then it ne that additional utility derived from spending last rupee on Good X is the additional utility derived by spending it on good Y. Due to this, the consumer wi (or decrease the consumption of good Y), Il MUy/Px = MUy/Py@v 2D (Law of Diminishing Marginal Utility\must prevail i{us/ex > MU), Then it implies that additional utility derived from spending last rupee on Sood fe the additional utility derived by spending it on good Y. Due to this, the consumer will (or decrease the consumption of good Y), this will continue till MUx/Px = MUy/Py i(QMUdPeeMUTP), then it ingles that aditowsl uty. dutived frm sili dant oe ow Good X i» (WOREHKAW the addctowah hi ly ditived by 4 ik ow geod Y. Duce tris , Hu lonsnmer wil (ox Acouaye te ouscgon 4 pool) , the wil torinue KI M/p = MayFe ( Marks) & —_ It is a set too Wommodities that a consumer wy with hp ok Pevoulrvg Wark paces. 6 ~ iis a Ad of all te burndles that a lomsumer ae ow, bu with Was it ion ok po ig wat prices It shows what a consumer can afford to spend with his given > = 2 (mM) 7 4 CP) income. It is given byIt shows what a consumer can afford to spend with his given income. itis given by ur imme = Z 2 () | > E4 CPD > EL (Pp M= Money Income ae It represents the different bundles that a consumer can buy spending a ceed is entire income. A,8,6,0,€,F 7B wns de OXTere, ri riice ul pout P2 = Price of ia 2 X= M= Money Income — It represents the different bundles that a consumer can buy spending is entire income. A,B,¢,0,€,F ¢ ding ip ds ‘Re S|his entire income. “RB, 6, 0,€,F x * nd ¥ El hn Pr pa Hooke Rote deukarge RE x %* WHEN DOES A — Budget line shifts to the right only because of two reasons- fa) When Hix the Writer IMU, (0) When Has (paces Toth Hu ie Ae Uxase - Ze) FS line ® Budget line shift to the left when the following situations occur- Poona 1p 2Seep, FRG ’ oe - OEE ce line sits to the right only because of two reasons- fa) When tu (wome) tts owsumey MAES . (b) When Ha (prices bate) ta (re eotee deveose BREE, eaten Budget line shift to the left when the following situations occur- (a) when th (lwmorne| epics dearer (0) lan Hu FATE pple umtane InnereCoodX : (tpple) Age_NOVFERENCE CURVE A Bundle A itis a(Gurve)which shows all the €ombination of two goods)that give Eauel to the consumer. 26 nifference map: tt is the{collection of 13} that represent ctferent level of satisfaction. 25 Maun tects A consumer prefers a bundle where at least one (\t#°" commodity is more if not both. For example- A consumer will prefer (10, 9) over (9,9). — x (113 Mark) - Applictinn Based @ isthe rate at which the consumer is wing to give up good Vn order to get addtional unit ‘of good X. 7 ae: i = A goods sacrificed (Y) \ ‘A goods gained (X) a MRS Is the (Suore y =consumer prefers a bundle where at least one not both. For example- A consumer will prefer (10, 9) over ARUN (1/3 Mork) Ayton Bac @ Itis the rate at which the consumer is willing to give up good Y in order to get additional unit of ‘good z. {goods gained (X) oto (CONSUMER'S EQUILIBRIUM (1c Approach or Ordinal Approach) ~ Asin tions- ( Y Consumer is ‘ Utility is@rdinal) - =-- Ranks) m Consumer has . Price of goods and income of consumer isfixed or given) @5s. consumption ofatleost two aoods mustbe there, —— (OO > Sure &4. Price of goods my income of consumer is{fixed or given) ®s. Consumption of at least two goods must be there. —— Siete pone ae (© MRSwis diminishing ie,(IC should be convex o the origin. @ ~ REGIA (MRS > P/P,) - It implies that the consumer is wil MORE units of ¥ as com to what is required in due to which he will lead to fall in the utility of good X and finally MRSyy starts falling till the time MRSw=Pa/Py (Point €)1 MRS = MRE Or a Qe MRSxy is diminishing i.e.{IC should be convex fo the origin. @?- ‘ARPOINEIA (MRS > Px/P) - It implies that the consumer is willing to sacrifice MORE units of Y as compared to what is required in ike due to which he will which k lead to fall in the utility of good X and finally MRSx starts falling till the time ¥ (wasn =Pdm Toit €) So. (MRS. (A,8,) implies wowsioraghon Bundle & en ZG,Sod AL 8 RR ey Be 0 a ba it ible Aint ke + eee iy ( > (A, B,) inglies wonrungtion Bundle E on Id, > (A, B,) inplos tenuraption Bundle Q on Ie, 5M tu same Luk q "AY Hu lovuaermer will + Buwdle & as hs Ly : 4 re rt AMows Hud bifher GaAX ts 6, ie ea on a + IC is a be: to oblain one \ unit of % qd | ue awe te Aacrtfice° === j — > G@AX “Ya de, wir a “nalupdlon + A se Ain oe unt 4 a A, We awe to Aacritice another wh 2 \C is ma igi Be owe Di i Mag Rade t Subst staton Gol (Hes) w Ie DOWNLOAD RKG INSTITUTE APP & RKG CA CLASSES APP | 9650719104 | www.rkginstitute.com | | 37]S Consumer) Nn Seabee Pa vee ----fD esive (+) Pics Ansring Power) Quantity of a commodity which a consumer is willing to buy at a given price during a particular period of time} It is also known oe co pam [3/5 v0r') Ba Price of commodity (Pi) Price of the commodity has 2 ee with the quantity demanded of the commodity i.e. if price of good | of good X increases, then quantity demanded for good fal] P (#) (VY) vice verse yw Price of related goo (Pi: - Than ave two A ee a) Substitute goods- Two goods Xowd Y ave a fp be! 7A PARA PARACFreeney we a earner particular period of time} It is also kno\ simesia ieieees [3/46 Marts Bg Price of commodity (Py) Price of the commodity has = Raia with the quantity demanded of the commodity i.e. if price of good : of good X increases, then quantity demanded for good xfals) f(®) D,(¥) vice verse ws Price of related goods (Pi): ~ Tarr are two (a) Substitute goods~ Two goods X awd Y ave au b ee 1 Bee ce of Good X wd with yon sed Op GoodY i if price of Good (Tea) Inu on qpantite damenke ¢ (ood Y ( vffee) dao inuases & Vice Vorsa,= se ” (Complimentarykoods - Ie X sad ave Aad b be Ee ” ao (ae howeal “Gs Cae Goold X mn quavtity ae Mi God ded ase. “feuTeenie (Y): As the income of the consumer changes, the quantity lemanded of various goods increase, decrease or remains constant. Goods which exhibits positive immme pe ate eS Sanwa q womal gods abho™ IH WIAe - Chae he idaidh Oxlubits gdh rome det je ast ivy good dewuanes . Tuy are wow Mires , darnond hae demanded Wy Uswer roup yowsiuneres Uys ods \awe tydter attewetve Jasgalaole fr fom in Ket. Eg Sayre 1s inerioy > heat As He raome f Hae wwowmer puceses , dernand fre necessity fous do wot dang i Salt (T): Taste and preference of the consumer also affects the auantitv demanded af the gand. In case af demand for the eand willmemos Cade shih exhibits Ne wide imo tem Tmo MUases Lanand ‘ ier od devrar ‘4 on demanded w dsiver rovp_eaysurney beer alteradve Gauk Uys ods awe awoidlalle fhe Fav tt. Eq - Bara Is iwerioy to ileal. - RERBEIIER s te ome Ff Hee wovsemer iumeeses , de vwond, for rece sity fools do wot dnange G- sult (T): Taste and preference of the consumer also affects the quantity demanded of the good. In case of favorable taste, favorable taste, demand for the good will (Be higher) in case i] demand for good will generally lower. lower. It depicts the relationship between quantity demanded and determinants of demand.—_____... quantity demanded of the good. In case of favorable taste, demand for the good will Incase en for good will generally ower. 5. Other Factor (0): Example Demand for $608) fashion is generally (Figher,) It depicts the relationship between quantity demanded and determinants of demand. Here, Dx = Quantity demanded of good X —~ Y= Income of consumer --~ T= taste and preference -—~ = other factors \_~ y (Bermandlsehedle - iis 2 TABULAK PRESENTATION showing diferent quantity of commodity demanded at different prices during a given period of time.7 Demand Schedule ~ it is a TABULAR. PRESENTATION showing different quantity of commodity demanded at different prices during a given period of time. Price of Good X (Px) Quantity demanded of Good X ES LD units zy 3 unis e3 5 ue EQ & wns Ea 14 wits 8 (4) Q,(%) DOWNLOAD RKG INSTITUTE APP & RKG CA CLASSES APP | 9650719104 | www.rkginstitute.com | | |© iam states that (CETERIS Pani Bus , quantity demanded for a commodity is: related to its price. -4. Price of related good remains constant. @ % Income of the consumer remains constant. % No.change in Taste and Preference of the consumer. @ © Other factors also remain constant. w Y (peniandcine = It is ea showing different quantity of commodity demanded at different prices during the given period of gggesia tine. noma = (PO [PRT (BUGIHRERIEDEE (sir Robert Giffen) - ete tg wale stave nods whose seollors Q11 CHOU UF PORT TAG 2 maar Pel ea (Sir Robert Giffen) - tal ——=- “tase yoods “ids. R Bread ay He L: = tock Hh e . . ‘se 5) vig ver [Mut » Bread | (lceiipisieiageowe) ok Vea LeN Goons =OR SNOB Coons € ve ds FN tds alleeadats SoaCm = oR eee a p : SNOB Goons ve ive wi as Sou cy cy as re vise el id ice in price. - Diaxmond No ae in Y taal or ve dus ee t in dow with ves pus a) Uns in pee a ry) al“4 ‘kmergency goods — Medicine. ef pd wi No chavye fe in demalndy - > aT Gods ulate = rr bewme aster ove purdaucd mM patties wenit Huir paw ‘ave “iS! oul" Gold de Na “a~ tpuier ave pardeaacd in Lory Gaaviities even if ur pe ave NSM ey Land, Gold de gi Gu if fl N (Wiilvoes tHe Law oF DEMAND OPERATE? iy? Hal OR (AY s THere AN INVERSERELATION BETWEEN PRICE AND QUANTITY DEMANDED? OR [ils couocamebowwnasomne |. oR Om” DOES THE CONSUMER BUY MORE OF A COMMODITY WHEN ITS PRICE FAla - As more and more unit of a commodity is consumed, the utility derived from it goes on decreasing. So the price has to be decreased to sell more units of a "C! 2. ‘Income effect - When the price of a commodity falls, the real nel purchasing power of the consumer increases which leads to increase in the quantty(Q/S) coffee Tea, 3. SUBSitION/ effet - substituting 2 cheaget Sami for a relatively expensive commodity is known as substitution effect. Therefore, demand of a commodity falls when its price rises. Ne. qf Gwsamer® 4. - When price of a commodity falls, new ci market and start buying more of that good. Therefore its demand increases when the price falls. —— % | Price Med (niome det (+) Stuesty Mwhen its price rises. Ne. qf bosamert - When price of a commodity falls, new c market and start buying more of that good. Therefore its demand increases when the price falls. Price Het = Iniome Get (+) Sidon a wr D, = €C Py hk, ¥, T, 0)pg CHANGE IN QUNATITY DEMANDED | CHANGE IN DEMAND IE 0CcUMS due +p ye ie | 1M ocumks dun td in PRE te oh | im faders OTHER THAN PRUE He Ly ae * Thee ncwense im sve 4) Devemse in demand 2. *T wes wc a) EXPANSION §) CONTRACTIONDemanded 1 ' Y oF CHANGE IN QUNATITY DEMANDED _ CHANGE IN DEMAND 1 ocuws daa b my Ik 0CcUAS duc to chawge in PRICE oh Ha, tom im factors OTHE A THAN PRUE 4 Ho ya ody 2 Ture - j2. T fe 1% EXPANSION : GS inceease in dowawd b)_ CONTRACTION §) Deceane in demand()) (BPARBIOWINGEWAN) «0% [INCREASE IN QUANTITY DEMANDE D 79 HE {an pce price of a commodity. > [HIBRBE]— fribally ok Price Po, dowarded is Q, tt ee A ae demand wwe yon With te. ‘tuff ‘in ce fm fy te Py quantity domandd suises fom Q, + &, ok Point @ onthe same dimand awe DD. This vise is Kwen a EXPANSION IN DEMAND 4 aae- a OF ~ X (Px) QUANTITY OF DEMANDED (Qx) loo units : . [20 wits E \o ISo wuts =o5 Qlo wuts= IE = nee 1 ~ ot Polat B one same dvawd awe DD. this vse is Kwon a EXPANSION IN DEMAND 7 PRICE OF GOOD X (Px) QUANTITY OF DEMANDED (Ox) ] Eis loo units Er [Ro wuts E io ISo units Es Qlo units a= a Us Price fabs Qusity demands ase DOWNLOAD RKG INSTITUTE APP & RKG CA CLASSES APP | 9650719104 | www.rkginstitute.com | | 22@) (eonrscriOn WENN) oR \DECREASE IN QUANTITY Demanded. 7 HBB {se price of a commodity. ~ aa witidly ok pace Po, gponrhty demande is Q. ak point A onthe ae oe Dd. ite fia wise in pace fom p, be, tent dnl falls frm Q, b Q, ak poi B on ae same dembnd we DD- this fall is Known a ConrTRACTDN _ IN DEMAND ae OF GOOD x (Px) QUANTITY DEMANDED OF GOOD x (0x) zo (oo units | 23 Fo Units = 10 Fo butsx Quai parnandad Q & (Say loounits) (say |ounts)x ° & & Quartity dawanded Chou Sounit’) (Say loourits) of Gand* = a iw fe | rindi x Fal in Newuethta 3. Indore int eNom bis. ny 4. Devure in Inome (| ate 5. Favouyable tne Tee. in mame vtelly "ak price Po, quarity demand is Q, at Qed qrve DD. With te lai (t in dewand wie from Dd f DD, , demand inreses fom A, With NO CHANGE IN PRICE. this daft few DD Dp, is Knwwn ap IRIGUTUARDS! slit tm domed wwece of past, oh (Psi) 2 = in peg bo Greil ( bee ") 3. Ockumre in ood») 4 Mure in ene Ct ‘roy ds. 5 Umfavouvable dravye in feste ( (GBB Wwihaldy of Pre Po, duentiy dem is Oot ewok cuwe DS. Wie Bu shuft i demand cove tow DD t DD, , demand devreres fon By ® 8, wit No tha im Rove, Teas shi OD >» DD. is Schedule - aren Kwon as A sed sat inn demand caveGood x Baukuoard Ault.) in demand we x Quawhty of Good~& z= Bo wwits = lo A units Fo 4D lite “RISE IN INCOME OF THE CONSUMER Will ALWAYS INCREASE THE DEMAND oF A COMMODITY.” DEFEND OR REFUTE. \ the given statement. The above statement holds true only in case of normal good but in case of inferior good the demand falls with rise in income and in case of necessity goods the demand does not change with rise in income. Conclusion - We can conclude that a rise in income will not always increase the demand of commodity. prices during a given period. forecample AQ a) a CONSUMERSRR RRA AR] consumers onareat of quantities demande yo the consumes Itis the| in the market at different prices during a given period. For example: fi | | €t To units | do units Soo units +? | | =2 Buwits | (So unite | %5e waite Yok "3 5 uwits | loo units | 200 units» 305 | ei 2 wits | 5S une. | [So wath i? 202