Question

Question 4.1

1. Use graphs and clear words to distinguish a change in the quantity demanded of labor from a change in demand for labor.

2. Use graphs and clear words to distinguish an increase in the quantity supplied of financial capital from an increase in the supply of financial capital.

3. Give an example of a factor which in your view represents the best and clearest explanation of a change in demand as opposed to a change in quantity demanded?

4. Give an example of a factor which in your view represents the best and clearest explanation of a change in supply as opposed to a change in quantity supplied?

Answer 1

Change in quantity demanded is measured by movement of demand curve while change in demand is measured by shifts in demand curve.Change in quantity demanded means expansion or contraction of demand along the demand curve due to change in price of the product while change in demand means incresae or decrease in demand ie shift of demand to the right or to the left at the same price due to other factors like change in oncome, prices of related goods,chnage in trends and fashion , expectation about future etc.

Financial capital refers to assets by a comapany in order to provide goods and services as measured in money value.It is the money needed to purchase capital goods .If there is increase in supply of finanacial capital the supply curve will shift to the right at the same price.The amount  supplied will then increase .If there is increase in quantity supplied there will be no shifting of supply curve but a movement along the supply curve . This is due to change in the price of the product . If the price increases  there will be increase in the supply.

Change in income of the consumer is afactor which leads to change in demand but there is no change in quantity demnaded.Eg Incase of normal goods an increase in income incresaes the demand and vice versa. income c

Changes in the price of inputs is afactor which explains change in supply but there is nochange in quantity supplied . A change in the cost of input will incresae the cost of production and supply curve will shift outward with decresae in cost and will shift inward with increase in cost.

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