ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A classic example of inferior good is public transportation. When consumer income is low, people use the bus. If the economy grows and consumer income increases, people stop using the bus and buy cars instead.

Detailed explanation-2: -Answer and Explanation: Reason: Public buses are considered inferior goods because people with less income avail public buses to travel short and long distances.

Detailed explanation-3: -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-4: -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-5: -Definition of Giffen goods It is due to the reason that income effect of higher price supersedes substitution effect. It includes those goods which consumers considers inferior and which occupy an essential place in consumer’s budget such as wheat, rice, etc.