Question

Match the items of List-I with those in List-II and select the correct code for the answer:

List-I	List-II
(a) Contraction of Demand	(i) Non-Price change effect
(b) Decrease in Demand	(ii) Demand curve remains the same
(c) Increase in Demand	(iii) Price change effect
(d) Expansion of Demand	(iv) Shifts the Demand curve

• A. $\left(a\right)-\left(iii\right),\left(b\right)-\left(i\right),\left(c\right)-\left(iv\right),\left(d\right)-\left(ii\right)$
• B. $\left(a\right)-\left(iv\right),\left(b\right)-\left(iii\right),\left(c\right)-\left(ii\right),\left(d\right)-\left(i\right)$
• C. $\left(a\right)-\left(i\right),\left(b\right)-\left(ii\right),\left(c\right)-\left(iii\right),\left(d\right)-\left(iv\right)$
• D. $\left(a\right)-\left(ii\right),\left(b\right)-\left(iv\right),\left(c\right)-\left(i\right),\left(d\right)-\left(iii\right)$

Answer 1

Answer: (A)

$\left(a\right)-\left(iii\right),\left(b\right)-\left(i\right),\left(c\right)-\left(iv\right),\left(d\right)-\left(ii\right)$

a) Contraction of demand matches with price change effect, since contraction of demand refers to a situation when the demand decreases because of only price change.

b) Decrease in demand matches with non--price change effect since decrease of demand refers to a situation when the demand decreases because of change in other factors, other than price.

c) Increase in demand causes shifts in demand curve since increase of demand refers to a situation when the demand increases because of change in other factors, other than price.

d) Expansion of demand causes demand curve to remain same, since Expansion of demand refers to a situation when the demand increases because of only price change.