Question

Match List-I with List-II:

List-I	List-II
(A) Consumer equilibrium	(I) MRS = Ratio of prices
(B) Necessity goods	(II) Unit elastic demand
(C) Total expenditure decreases with increase in price of the good	(III) Inelastic demand
(D) Rectangular hyperbola demand curve	(IV) Elastic demand

Choose the correct answer from the options given below :

• A. (A)-(I), (B)-(III), (C)-(IV), (D)-(II)
• B. (A)-(II), (B)-(III), (C)-(I), (D)-(IV)
• C. (A)-(III), (B)-(IV), (C)-(I), (D)-(II)
• D. (A)-(I), (B)-(II), (C)-(III), (D)-(IV)

Answer 1

The Correct Option is B

The correct match is based on terms like consumer equilibrium and elastic/inelastic demand.

Answer 2

The correct match is based on terms such as consumer equilibrium and elastic/inelastic demand. These terms play an essential role in understanding how consumers make choices in the market and how they respond to price changes.

Consumer equilibrium refers to the state in which a consumer maximizes their satisfaction given their income and the prices of goods and services. At this point, the consumer allocates their budget in such a way that the marginal utility per dollar spent on each good or service is equal, ensuring that no further rearrangement of their spending would provide more utility.

Elastic demand occurs when the quantity demanded of a good is highly responsive to changes in price. A small decrease in price leads to a large increase in quantity demanded. This typically happens with non-essential goods or goods with many substitutes. On the other hand, inelastic demand refers to a situation where changes in price have little effect on the quantity demanded. This is typical for necessities or goods with few or no substitutes. Understanding these concepts helps in analyzing market behavior and making informed decisions regarding pricing, taxation, and production strategies.