Assertion A The demand curve is downward sloping Reason R Income effect means with fall in ...........

Introductory Microeconomics Consumer Behavious and Demand

Assertion (A): The demand curve is downward sloping.

Reason (R): Income effect means with fall in the price of a good, consumer's real income or purchasing power rises and he demands more units of the good.

Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true, but Reason (R) is false.

Assertion (A) is false, but Reason (R) is true.

Explanation:

Option (1) is correct.
Explanation: Income effect means with fall in the price of a good, consumer's real income or purchasing power rises and he demands more units of the good. This shows that when
the price falls, demand increases and so the demand curve is downward sloping.

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