a-3, b-1, c-4, d-2
a-4, b-3, c-2, d-1
a-1, b-2, c-3, d-4
a-2, b-4, c-1, d-3
Answer is Right!
Answer is Wrong!
The correct answer is: C. a-1, b-2, c-3, d-4
- a. Contraction of demand is a decrease in the quantity demanded of a good or service at any given price. It is caused by a non-price change effect, such as a change in consumer income, a change in the price of a substitute good, or a change in the price of a complementary good.
- b. Decrease in demand is a decrease in the demand curve, which means that the quantity demanded at any given price is lower. It is caused by a price change effect, such as an increase in the price of the good.
- c. Increase in demand is an increase in the quantity demanded of a good or service at any given price. It is caused by a non-price change effect, such as an increase in consumer income, a decrease in the price of a substitute good, or an increase in the price of a complementary good.
- d. Expansion of demand is an increase in the demand curve, which means that the quantity demanded at any given price is higher. It is caused by a price change effect, such as a decrease in the price of the good.
Here is a diagram that illustrates the difference between a decrease in demand and a contraction of demand:
[Diagram of a demand curve with a decrease in demand and a contraction of demand]
The blue line represents the original demand curve. The red line represents the new demand curve after a decrease in demand. The green line represents the new demand curve after a contraction of demand.
As you can see, a decrease in demand results in a movement along the demand curve, while a contraction of demand results in a shift of the demand curve.