Question

I-2. What is the Law of Demand? It states, when the price of a ood goes up(down), people always buyof t, other things being equal I-3. Shifts in Demand A good for which an increase in income leads to an increase in demand, is called A good for which an increase in income leads to a decrease in demand, is called Two goods for which increase in price of a good leads to an increase in demand for the other, are called Two goods for which increase in price of a good leads to a decrease in demand for the other, are called good. good. 1-4. What is the Law of Supply It states, other things being equal, the quantity supplied of a good when the price of the good rises. -5. Market Equilibrium There is a point at which the supply and the demand curves intersect each other. This point is called the market The price at this intersection is called the and the corresponding quantity is called the price quantity 1-6. Rationing Fundliba oPrjouise do eventually? It, in effect, rations a good to demanders who are willing and able to pay the price.

Answer 1

Answer 1-2 - It states that when price of good goes up(down), people will always buy less(more) of it. Other things being equal.

Answer 1-3 -

A good for which an increase in income leads to an increase in demand is called normal good.

A good for which an increase in income leads to decrease in demand is called inferior good.

Two goods for which increase in price of a good leads to an increase in demand for the other, are called substitutes

Two goods for which increase in price of a good leads to a decrease in demand for the other, are called complimentary goods

Answer 1-4 - It states, other things being equal, the quantity supplied of a good increases when the price of the good rises.

Answer 1-5 - There is a point at which the supply and the demand curves intersect each other. This point is called the market equilibrium

The price at this intersection is called the equilibrium price

and the corresponding quantity is called the equilibrium quantity

As per HOMEWORKLIB RULES first 4 questions have been answered. For answers to further questions please post them saperately. Thank you.