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Theory Of Consumer Behaviour

Question

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What is the relation between good x and good y in each case if with fall in price of good x demand for good y (i) rises, (ii) falls. Give reason.

Solution

Hint, (i) They are complementary goods since fall in price of good x has caused a rise in demand for good y.

(ii) They are substitute goods because fall in price of good x has caused fall in demand for good y.

Some More Questions From Theory Of Consumer Behaviour Chapter

When does a consumer attain equilibrium according to indifference curve approach?

Give meaning of demand.

Name two determinants of demand.

List the factors that cause changes in demand.

What is law of demand?

What is demand schedule?

Why does demand curve slope downwards?

Differentiate between substitute and complementary goods.

What is meant by one good being substitute of other?

What is meant by one good being complementary to another.

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