ECONOMICS (CBSE/UGC NET)

ECONOMICS

ELASTICITY OF DEMAND

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
IDENTIFY TYPE OF GOOD-POOR QUALITY FOOD STUFFS
A
NORMAL GOOD
B
INFERIOR GOOD
C
Either A or B
D
None of the above
Explanation: 

Detailed explanation-1: -Food. Groceries are among the most common examples of inferior products because food is a necessity that must always be acquired. However, the level at which consumers by food may vary. As opposed to eating a steak for dinner, an individual may opt for an inferior product such as canned meat or frozen food.

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: -Whereas staple foods are as a rule inferior goods, medical goods and services are generally regarded as superior goods, whose social valuation tends to increase with time. The effect of an increase in incomes on the demand for specific goods can be analyzed by means of the “income elasticity of demand”.

Detailed explanation-4: -There are four different types of goods in economics, which can be classified based on excludability and rivalrousness: private goods, public goods, common resources, and club goods.

There is 1 question to complete.