a-1, b-2, c-3
a-2, b-3, c-1
a-3, b-1, c-2
a-2, b-1, c-3
Answer is Wrong!
Answer is Right!
The correct answer is D.
- The law of demand states that, all other things being equal, the quantity demanded of a good will decrease as the price of the good increases.
- Giffen goods are a type of good that is an exception to the law of demand. For Giffen goods, the demand curve slopes upward, meaning that the quantity demanded of the good increases as the price of the good increases. This is because Giffen goods are necessities for people, and when the price of a necessity increases, people have less money to spend on other goods, so they demand more of the necessity.
- Veblen goods are a type of good that is an exception to the law of demand in the opposite way as Giffen goods. For Veblen goods, the demand curve slopes downward, meaning that the quantity demanded of the good increases as the price of the good increases. This is because Veblen goods are luxury goods that are seen as status symbols, and when the price of a luxury good increases, it becomes more exclusive, which makes people want it more.
- Normal goods are goods that have a positive relationship between price and quantity demanded. This means that when the price of a normal good increases, the quantity demanded of the good decreases, and vice versa.
Therefore, the correct match is:
- a. Law of demand is fully applicable 3. Normal goods fully applicable
- b. Law of demand is not applicable at all 1. Giffen goods not applicable
- c. Law of demand is partly applicable 2. Veblon goods partly applicable