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You should know : 2) Aggregate demand is a macro economic
1) Demand is a micro economic concept. concept. It refers to the total amount of
Demand is that quantity of a commodity sales proceeds which an entrepreneur

which a person is ready to buy at a actually expects from the sale of output
particular price and during a specific produced at a given level of employment
period of time. during the year.

EXERCISE

Q. 1. Complete the following statments : Q. 2. Give economic terms :

1) The relationship between demand for a good 1) A situation where more quantity is demanded at
and price of its substitute is…….. lower price ………
a) direct 2) Graphical representation of demand schedule
b) inverse ………
c) no effect 3) A commodity which can be put to several uses

d) can be direct and inverse ………
2) The relationship between income and demand 4) More quantity is demanded due to changes in the
for inferior goods is……. factors determining demand other than price
a) direct ………
b) inverse 5) A desire which is backed by willingness to
c) no effect purchase and ability to pay ………

d) can be direct and inverse
Q. 3. Distinguish between :
3) Symbolically, the functional relationship
1) Desire and Demand
between Demand and Price can be expressed as
2) Expansion of demand and Contraction of demand
................
3) Increase in demand and Decrease in demand
a) Dx = f(Px)
b) Dx = f(Pz) Q. 4. State with reasons whether you agree or
c) Dx = f(y) disagree with the following statements :
d) Dx = f(T) 1) Demand curve slopes downward from left to
4) When less units are demanded at high price it right.
shows ............... 2) Price is the only determinant of demand.

a) increase in demand 3) When price of Giffen goods fall, the demand for
b) expansion of demand it increases.
c) decrease in demand
d) contraction in demand

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