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JAMB Economics 1980 Question 31

Question 31

Theory of Demand

When we draw a market demand curve, we

  1. A.ignore tastes, incomes and other prices
  2. B.assume that tastes, incomes and other prices do not matter
  3. C.assume that tastes, incomes and all other prices change in the same direction as prices
  4. D.assume that tastes, incomes and all other prices remain constant
  5. E.both A and B above.
Show the answer and explanation

Answer: D (assume that tastes, incomes and all other prices remain constant)

Explanation

A demand curve shows quantity against the good's own price, holding tastes, income and other prices constant (ceteris paribus).