[Solved] What will be the effect on inferior commodities when income of the consumer rises?

McqMate

Q.	What will be the effect on inferior commodities when income of the consumer rises?
A.	Negative effect
B.	Positive effect
C.	No effect
D.	First increase then decrease
Answer» A. Negative effect
Explanation: In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.

3.3k

0

Do you find this helpful?

24

View all MCQs in

Discussion

No comments yet

Related MCQs

In the case of an inferior good, the income elasticity of demand is :
Over short period, when income rises, average propensity to consume usually -
If the main objective of the government is to raise revenue, it should tax commodities with
If two commodities are complements, then their crossprice elasticity is-
For an inferior good, demand falls when -
Trade by exchange of Commodities is called:
The demand for two or more commodities or factor of production that are used together so that a change in demand for one will be reflected in a change in demand for other e.g., cloth and thread is called
Commodities or assets with some economic value which exist without any effort of mankind, are called:
Which of the following occurs when labour productivity rises?
In a period of inflation and price rises the supply of money remains -