An inferior good is one for which an increase in income causes a(n) ?
Correct answer: D. decrease in demand
- A. decrease in supply
- B. increase in demand
- C. increase in supply
- D. decrease in demand
Explanation
An inferior good is purchased less when consumers become richer, so higher income causes its demand to decrease. Examples may include low-cost staple foods or second-hand goods, depending on consumer preferences.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
An increase in income will ?
A shift in supply will have a bigger effect on price than output if demand is ?
If the price was fixed below the equilibrium price there would be ?
Suppose consumer tastes shift toward the consumption of apples Which of the following statements is an accurate description of the impact of this event on the market for apples ?
Which of the following statements is true about the impact of an increase in the price of lettuce ?
Suppose there is an increase in both the supply and demand for personal computers. In the market for personal computers, we would expect?