ECO401 GDB Solution Spring 2021 Download PDF
| Question Title | Consumer Behavior: Consumption side analysis |
| Question Description | In the year 2020, Pakistan faced the deadliest of the natural calamities in form of locust attack. Due to this the agriculture sector faced a loss of almost 353 billion rupees. Both the winter and summer crops were damaged partially, and after many years the Government of Pakistan decided to import the food items, to maintain the market price. In this background let’s assume, two groups, A and B are living in the country, with certain rational behavior towards the commodity prices of essential food items like wheat. Both groups have a different opinion about wheat. People from group A consider wheat as a staple food, while people from group B consider it as a normal good. During the last month due to the fall in the commodity prices, it was observed, that people from group A, decreased their demand for wheat, where as people from group B increased their demand for wheat. Requirement: Which type of product is wheat for people from group A and people from group B? What will be the income effect for the people from group A? |
Which type of product is wheat for
people from group A and people from group B?
·
A
Giffen product may have been a sense that demand will increase because the
worth will increase and falls the demand once the value decreases. as a result
of it's the human mind that higher value merchandise at higher. A decrease
within the worth will certainly decrease the demand for what A product. the
demand decrease: worth decreases, amount decreases.
·
B
may be a substitute product the decrease within the worth of wheat can
decreasing the demand for its substitute. An inverse relationship is delineated
by the downward sling line from left to right.
What will be the income effect for the people from group A?
Second rate products are great for which request decreases as
customers' genuine livelihoods rise. So falls request when the cost diminishes.
So, wage increment so he doesn’t take any products who have not advantageous
for buyer since exceptionally caring for wellbeing.
_________________________________________
***** END OF GDB Solution *****
***** BY: Abdul Hadi E Services *****
Download Solution in MS word
 |
| ECO 401 GDB Solution Spring 2021 |
0 Comments
Please write us. Please write in detail that how may we help you