The correct answer is: D. a-1, b-2, c-3, d-4
List-I | List-II
——- | ——–
a. Non-price quantity relationships of demand | 1. Extension and contraction of demand
b. Income effect of a price rise greater than its substitution effect | 2. Giffen goods
c. Transitivity and consistency of choices | 3. Ordinal utility approach
d. Price quantity relationships of demand | 4. Increase and decrease in demand
Explanation:
a. Non-price quantity relationships of demand: This refers to the factors other than price that can affect the demand for a good or service. These factors include income, taste, and expectations.
b. Income effect of a price rise greater than its substitution effect: This refers to the situation where the income effect of a price rise is greater than the substitution effect, resulting in a decrease in demand.
c. Transitivity and consistency of choices: This refers to the principle that if a consumer prefers good A to good B, and good B to good C, then they must also prefer good A to good C.
d. Price quantity relationships of demand: This refers to the relationship between the price of a good and the quantity demanded of that good. The law of demand states that, ceteris paribus, the quantity demanded of a good will decrease as the price of that good increases.
Giffen goods are a type of good that is an exception to the law of demand. In the case of a Giffen good, the demand for the good actually increases as the price of the good increases. This is because the good is a necessity for the consumer, and the consumer is willing to pay more for the good even though it is now more expensive.