ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A normal good is one whose demand increases when people’s incomes start to increase, giving it a positive income elasticity of demand. Inferior goods are associated with a negative income elasticity, while normal goods are related to a positive income elasticity.

Detailed explanation-2: -Private Goods are products that are excludable and rival. Public goods describe products that are non-excludable and non-rival.

Detailed explanation-3: -In economics, an inferior good is a good whose demand decreases when consumer income rises (or demand increases when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those goods for which the demand rises as consumer income rises.

Detailed explanation-4: -Normal goods are different from inferior or luxury goods. Inferior goods have an income elasticity of less than 1, while luxury goods have an income elasticity that is greater than 1.

Detailed explanation-5: -Note that, with two goods, at least one is a normal good-they can’t both be inferior goods because otherwise, when income rises, less of both would be purchased.