Question

State whether the following statement are TRUE and FALSE

1. Demand curve slopes upward from left to right.

2. Desire means demand.

3. When demand increases, the demand curve shifts to the left.

4. Quantity demanded varies directly with price.

5. Law of demand is explained by Prof. Robbins.

6. Individual demand is a demand by single buyer.

Answer 1

1. FALSE
The demand curve is the graphical representation of the relationship between the demand for a good and its price for a given income, price of related goods, tastes and preferences. This curve slopes downwards from left to right because of the negative relationship between the price of the commodity and its demand. In the diagram below, DD is the demand curve.



2. FALSE
Desires refer to those wishes that a human being cherishes such as to walk on the moon, to be a billionaire and to buy a Rolls-Royce. These wishes may not always be backed by enough finance to realise them. It is only when a desire is backed by sufficient purchasing power, along with the consumer’s readiness to spend on materialising the wish, it becomes demand. Thus, until a consumer has sufficient money and he/she is willing to spend, a desire will remain a desire.

3. FALSE
When demand increase, i.e. when the demand for the good increase as a result of a change n factors other than price, the demand curve shifts parallel towards right. On the other hand, when demand decrease, the demand curve shifts to the left..

4. FALSE
Quantity demanded has an inverse relation with the price of a commodity. Other things remaining constant, as the price of the commodity increases, the quantity demanded decreases, and vice-versa.

5. FALSE
The law of demand was postulated by Dr. Alfred Marshall in his book ‘Principles of Economics’. According to the Law of Demand, other things remaining constant, as the price of a commodity increase, the quantity demanded of it falls and vice-versa.

6. TRUE
Individual demand is the demand of a commodity by a particular consumer. It represents various quantities of a particular commodity that a consumer (single buyer) is willing to purchase at different possible prices at a particular point in time.