Asked by
Patrick Tobler
on Oct 14, 2024Verified
John purchases two goods, x and y.Good x is an inferior good for some range of income.There must be another range of income for which good x is a normal good.
Inferior Good
A type of good whose demand decreases as the income of consumers increases, opposite to normal goods.
Normal Good
A type of good for which demand increases when income increases, and falls when income decreases, but price remains constant.
Income Range
The spectrum of income levels, from the lowest to the highest, that exists within a given population or among a specific group of individuals.
- Understand the relationship between income changes and the classification of goods as inferior or normal.
Verified Answer
RM
Learning Objectives
- Understand the relationship between income changes and the classification of goods as inferior or normal.