Question

The price of cauliflower goes up by 8% and total expenditure by a family goes up by 8%. What can we say about e_D for cauliflower by this family?

Solution

According to expenditure method, since price and total expenditure move in the same direction, i.e., both rise (i.e., direct relationship), therefore e_D is less than 1 (e_D< 1).

Some More Questions From Theory Of Consumer Behaviour Chapter

Starting from an initial situation of consumer's equilibrium, suppose that marginal utility of a rupee increases. Will it increase or decrease the quantity demanded of the product?

What are two approaches to attain the state of consumer's equilibrium?

Define indifference curve.

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Theory Of Consumer Behaviour

The price of cauliflower goes up by 8% and total expenditure by a family goes up by 8%. What can we say about e_D for cauliflower by this family?

Some More Questions From Theory Of Consumer Behaviour Chapter

Starting from an initial situation of consumer's equilibrium, suppose that marginal utility of a rupee increases. Will it increase or decrease the quantity demanded of the product?

What are two approaches to attain the state of consumer's equilibrium?

Define indifference curve.

What is meant by marginal rate of substitution (MRS)?

Why is MRS always diminishing?

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?

Mock Test Series

NCERT Sample Papers

Entrance Exams Preparation

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For Daily Free Study Material Join wiredfaculty

Theory Of Consumer Behaviour

The price of cauliflower goes up by 8% and total expenditure by a family goes up by 8%. What can we say about eD for cauliflower by this family?

Some More Questions From Theory Of Consumer Behaviour Chapter

Starting from an initial situation of consumer's equilibrium, suppose that marginal utility of a rupee increases. Will it increase or decrease the quantity demanded of the product?

What are two approaches to attain the state of consumer's equilibrium?

Define indifference curve.

What is meant by marginal rate of substitution (MRS)?

Why is MRS always diminishing?

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?

Mock Test Series

NCERT Sample Papers

Entrance Exams Preparation

The price of cauliflower goes up by 8% and total expenditure by a family goes up by 8%. What can we say about e_D for cauliflower by this family?