ASSIGNMENT

Unit II: Consumer equilibrium and demand

1. Define demand. Explain in detail “Law of Demand”

Demand in economics is defined as consumers' willingness and ability to consume a given

good. An increase in price will decrease the quantity demanded of most goods. A decrease in
price will increase the quantity demanded of most goods. The inverse relationship between
price and quantity demanded of a good is known as the law of demand and is typically
Arguments
representedsuggesting unions
by a downward may hurt
sloping linethe economy:
known as the demand curve.

1. Labor Market Rigidity: Unions may lead to labor market inflexibility, making it harder for
businesses to adapt.

2. Increased Labor Costs: Union negotiations for higher wages and benefits can raise labor costs for
employers.

3. Reduced Competitiveness: Higher labor costs may make industries less competitive globally.

4. Strikes and Disruptions: Union-related strikes and disputes can disrupt production and lead to
economic losses.

Arguments suggesting unions benefit the economy:

1. Higher Wages and Better Conditions: Unions often improve wages and working conditions,
contributing to economic growth.

2. Reduced Income Inequality: Unions may help reduce income inequality by negotiating for better
worker compensation.

3. Stability and Worker Rights: Unions provide stability and protect workers' rights, contributing to a
more equitable society.

4. Consumer Benefits: Higher wages for unionized workers can stimulate economic activity through
increased consumer spending.

Overall, the impact of unions depends on various factors, and perspectives differ based on industry,
region, and individual viewpoints.

2. Do you think unions hurt the economy?