Worksheet: Theory of Consumer Behaviour - 2 | Economics Class 11 - Commerce PDF Download

Fill in the Blanks

Q1: Elasticity of demand measures the ______________ of demand due to changes in price.

Q2: Price elasticity of demand (ED) is the degree of responsiveness of demand to changes in its _______________.

Q3: Marshall defined price elasticity of demand as the percentage change in demand due to the percentage change in ____________.

Q4: Perfectly inelastic demand (ED = 0) occurs when the quantity demanded doesn't change with changes in the price of the __________.

Q5: Perfectly elastic demand (ED = ∞) occurs when demand changes infinitely without a change in price, existing under ___________ competition.

Q6: In the total expenditure method, when elasticity is greater than 1, it indicates __________ demand.

Q7: Availability of close substitutes makes demand more ____________.

Q8: Complementary goods have ____________ demand, as their demand is joint.

Q9: When price level is low, articles tend to have __________ demand.

Q10: In the case of a longer time period, demand tends to become more ____________.

Assertion and Reason Based

Q1: Assertion: Elasticity of demand measures the responsiveness of demand due to changes in price.
Reason: Price elasticity of demand (ED) measures the change in price due to a change in demand.
(a) Both assertion and reason are correct, and the reason is the correct explanation of the assertion.
(b) Both assertion and reason are correct, but the reason is not the correct explanation of the assertion.
(c) Assertion is correct, but the reason is incorrect.
(d) Assertion is incorrect, but the reason is correct.

Q2: Assertion: Perfectly elastic demand (ED = ∞) occurs when demand changes infinitely without any change in price.
Reason: It exists under perfect competition.
(a) Both assertion and reason are correct, and the reason is the correct explanation of the assertion.
(b) Both assertion and reason are correct, but the reason is not the correct explanation of the assertion.
(c) Assertion is correct, but the reason is incorrect.
(d) Assertion is incorrect, but the reason is correct.

Q3: Assertion: Availability of close substitutes makes demand more elastic.
Reason: Close substitutes provide consumers with alternatives, making them more responsive to price changes.
(a) Both assertion and reason are correct, and the reason is the correct explanation of the assertion.
(b) Both assertion and reason are correct, but the reason is not the correct explanation of the assertion.
(c) Assertion is correct, but the reason is incorrect.
(d) Assertion is incorrect, but the reason is correct.

Q4: Assertion: In the total expenditure method, when elasticity is greater than 1, it indicates elastic demand.
Reason: Elastic demand means that consumers respond significantly to price changes.
(a) Both assertion and reason are correct, and the reason is the correct explanation of the assertion.
(b) Both assertion and reason are correct, but the reason is not the correct explanation of the assertion.
(c) Assertion is correct, but the reason is incorrect.
(d) Assertion is incorrect, but the reason is correct.

Q5: Assertion: When price level is low, articles tend to have inelastic demand.
Reason: Inelastic demand means that small price changes do not significantly impact consumer budgets.
(a) Both assertion and reason are correct, and the reason is the correct explanation of the assertion.
(b) Both assertion and reason are correct, but the reason is not the correct explanation of the assertion.
(c) Assertion is correct, but the reason is incorrect.
(d) Assertion is incorrect, but the reason is correct.

Very Short Answer Type Questions

Q1: Define elasticity of demand.

Q2: What does price elasticity of demand (ED) measure?

Q3: Provide an example of perfectly inelastic demand.

Q4: Explain perfectly elastic demand and provide an example.

Q5: What is the characteristic feature of a unitary elastic demand?

Q6: Describe the concept of the total expenditure method.

Q7: Why does the availability of close substitutes make demand more elastic?

Q8: Give an example of complementary goods.

Q9: How does the time period affect the elasticity of demand?

Q10: What is the significance of understanding the elasticity of demand for a producer or firm?

Short Answer Type Questions

Q1: Explain the concept of price elasticity of demand (PED) and its importance in economics.

Q2: Differentiate between perfectly inelastic and perfectly elastic demand. Provide real-world examples for each.

Q3: Describe the factors that affect the elasticity of demand. Provide examples for each factor.

Q4: Discuss the total expenditure method for measuring elasticity of demand and its practical implications for producers.

Q5: Why does the price level influence the elasticity of demand? Provide examples.

Q6: Explain how the availability of close substitutes impacts the elasticity of demand.

Q7: Define and provide examples of goods with different uses that exhibit varying degrees of elasticity.

Q8: How does the time period affect the elasticity of demand, and why is this concept important in economic analysis?

Long Answer Type Questions

Q1: Describe the various degrees or types of price elasticity of demand and their implications for different goods and services. Provide examples to illustrate each type.

Q2: Discuss the limitations of the total expenditure method in measuring elasticity of demand and explain why it provides only a rough measure of elasticity.

Q3: Explain how the nature of a good, such as being a necessity, comfort, or luxury, affects its elasticity of demand. Provide insights into the relative nature of luxury goods.

Q4: Analyze the concept of habits and how they influence the elasticity of demand. Provide examples of products that have inelastic demand due to consumer habits and preferences.