ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Items that people tend to buy more of when their incomes increase. This is true of most goods and services.
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Items that people purchase more of when their incomes decrease. These items tend to be low-cost options for saving money.
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Items that may replace each other when used or consumed.
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Items that are almost always consumed or used together.
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Detailed explanation-1: -Typical examples of inferior goods include “store-brand” grocery products, instant noodles, and certain canned or frozen foods. Although some people have a specific preference for these items, most buyers would prefer buying more expensive alternatives if they had the income to do so.
Detailed explanation-2: -Inexpensive foods like instant noodles, bologna, pizza, hamburger, mass-market beer, frozen dinners, and canned goods are additional examples of inferior goods. As incomes rise, one tends to purchase more expensive, appealing or nutritious foods.
Detailed explanation-3: -Inferior goods are goods for which demand declines as consumers’ real incomes rise, or rises as incomes fall. Consumers with more money may opt to buy more expensive substitutes instead of what they could afford only when incomes were lower.
Detailed explanation-4: -Examples of inferior goods Food products in this category are less expensive than their normal goods counterparts, like fresh vegetables and fresh meat, and they tend to last longer, making them a more financially sound purchase. Specific examples might include: Canned vegetables. Instant noodles.
Detailed explanation-5: -b. If a good is an inferior good, increases in income will result in a decreasein demand while decreases in income will increase demand.