Question : Assertion: A consumer's demand curve for a substitute good slopes upward.
Reason: As the price of a substitute good decreases, the consumer switches from the more expensive good to the cheaper substitute, leading to an increase in the quantity demanded.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct option is (a) Option A Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion states that a consumer's demand curve for a substitute good slopes upward, which is true. A substitute good is a good that can be used in place of another good for a similar purpose. When the price of a substitute good decreases, consumers tend to switch from the more expensive good to the cheaper substitute. This leads to an increase in the quantity demanded of the substitute good.
The reason provided explains this relationship correctly. As the price of a substitute good decreases, consumers find it more attractive compared to the more expensive good. This leads to a substitution effect, where consumers shift their demand from the more expensive good to the cheaper substitute. The result is an increase in the quantity demanded of the substitute good.
Question : Assertion: A consumer's demand curve for normal good slopes downward.
Reason: As the price of a normal good decreases, the consumer can afford to buy more of it, leading to an increase in the quantity demanded.
Question : Assertion: A consumer's demand curve for a complement good slopes downward.
Reason: As the price of a complementary good decrease, the consumer is more likely to buy both goods together, leading to an increase in the quantity demanded.
Question : Assertion: A consumer's Engel curve for a normal good is upward-sloping.
Reason: As the consumer's income increases, their demand for a normal good also increases.
Question : Assertion: The substitution effect and income effect both contribute to the downward-sloping demand curve.
Reason: The substitution effect occurs when the consumer switches to a cheaper alternative, while the income effect reflects changes in purchasing power due to price changes.
Question : Assertion: The concept of consumer surplus represents the difference between the price a consumer is willing to pay and the actual price they pay for a good.
Reason: Consumer surplus reflects the additional benefit or utility the consumer receives from purchasing a good.
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