Write True of False

Answer T = True   F= False

Giffen Goods are inferior goods and so they do not occupy a significant place in the consumption basket of an individual.                               Ans. F

A rightward or leftward shift of the demand curve occurs due to change in price of the product.           Ans. F

A rise in the price of raw materials used in production shift the supply curve to the left. T

Demand for the substitutes move in the opposite direction.       T

Consumers are influenced by observing the behaviour of others in case of items of snob appeal.          T

When demand increases, supply being constant, new equilibrium price will be higher than the earlier one.  T

If the quantity supplied exceeds quantity demanded producers will increase the price of that commodity. F

With increase in income , consumers tends to replace inferior goods with superior goods. T

When price of a commodity rises,  the real income of a consumer is increased.  F

Positive income elasticity implies positive price elasticity.  T

Slopes of indifference curve bears relation with diminishing marginal utility. T

A concave indifference curve implies that marginal rate of substitution decreases along the curve. F

A feasible purchase of commodity bundle can never lie under the budget line  F

The law of diminishing Marginal utility holds good for items of addiction.  F

If the utility from commodity A is more than that from another commodity B, then the consumer would increase consumption of B and reduce the consumption of A.   F

Convexity implies that a curve is bowed away from the origin.    F

A higher indifference curve implies more quantities of both goods.  F