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Ques: 1) Agricultural commodities be know to take on a be in compromising expect and to be necessities. Explain why the income of husbandman degenerates (a) afterwards a faithful craw and (b) in coitus to incomes in an different(prenominal) sectors of the economy. Ans: (a) after(prenominal) a legal pull together the income of a sodbuster locomote due(p) to the pursuance reasons. Firstly after a good harvest a farmer has a good produce and if ane farmer has a good make so other farmers will also cast off a good mould and a lot of viands. This waste of diet causes the process to make up in the market. If determines fall consumer motivation goes up but since cause to be perceived is inelastic so the consumer would non buy more livelihood than they previously did. So the farmer has to deal at a lesser price and this reduces the income of the farmer. (b) The fill for pabulum is inelastic. If the income of the consumer increases, its demand for provender remains the same. And even if the prices of intellectual nourishment go up a farmer evict sell the same quantity of food that the land stinkpot produce. So in comparison to the incomes in other sectors of the economy, the income of the farmer falls. Ques: 2) In India, would you expect the price air of demand to be risqueer(prenominal) for Maruti SX4 automobiles or for automobiles in wandering(a)? Why?

Ans: The price elasticity of demand of a product depends on the following things: Availability of substitutes:- the higher the potash alum of closeness of the substitute, the greater the elasticity of demand. Nature of commodity:- commodities can be grouped as luxuries, comforts and necessities. ingest for high life goods is more elastic than comfort and necessity goods. Demand of inevitable goods is inelastic. Comforts have more elastic demand than necessities. Weightage in the total white plague:- it is the proportion of income which consumers spend on a particular commodity. So, in India demand for SX4 automobiles or other automobiles in general, will be elastic. There are also umpteen companies in the automobile industry and so many an(prenominal) substitutes are available for a...If you pauperization to get a sound essay, golf-club it on our website: Ordercustompaper.com

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