A good whose demand is inversely related to income is a(n)

Question

BlackTom AI · Accepted Answer

To tackle this question, let's recall the basic relationship between income and demand for different types of goods.
Option 1: normal good. A normal good has demand that increases as income rises, and decreases as income falls. Since the prompt specifies a good whose demand is inversely related to income, this option contradicts the defining characteristic of a normal good, so it is incorrect.
Option 2: regular good. The term 'regular good' is not a standard classification in typical consumer theory; however, any interpretation would still not align with the inversely related demand described. Regular goods are generally implied to behave like normal goods, so this option is not consistent with the inverse relationship, making it incorrect.
Option 3: new good. 'New good' refers to the novelty of the product and could be related to various demand shifts, but it has no inherent rule tying its demand inversely to income. The statement about inverse income demand does not fit the definition of 'new good,' so this choice is incorrect.
Option 4: inferior good. This option matches the core concept: an inferior good is one whose quantity demanded decreases as income increases, and conversely rises when income falls. The inverse relationship to income is the hallmark of an inferior good, making this the correct choice.
In summary, only the fourth option aligns with the established classification where higher income reduces demand for the good, and lower income increases it, which is the defining trait of an inferior good.

ECON 104, Section 001: Macroeconomic Analysis (22511--BR---P-ECON----104-------001-) Quiz 2

A good whose demand is inversely related to income is a(n)

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ECON 104, Section 001: Macroeconomic Analysis (22511--BR---P-ECON----104-------001-) Quiz 2

A good whose demand is inversely related to income is a(n)

View Explanation

Log in for full answers

Similar Questions

Suppose Diet Dr. Thunder soda is an inferior good. If the income of consumers increases, how will this affect the demand of Diet Dr. Thunder?

Soup is an inferior good if the demand

Due to a tuition rise, most students at a college find themselves with less disposable income. As a result, most of them eat more frequently at the school cafeteria and less often at restaurants.

Assume that store brand cereal is an inferior good. If income rises, then the price of store brand cereal will________ and the quantity sold of store brand cereal will _______.

Suppose that -holding prices and other exogenous factors constant- an increase in income causes Alyssa's demand for rice to fall. Then,

If the economy goes into a recession and incomes fall, what happens in the markets for inferior goods?

If a decrease in income increases the demand for a good, then the good is

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More Practical Tools for Students Powered by AI Study Helper

Making Your Study Simpler

Assume that store brand cereal is an inferior good. If income rises, then the price of store brand cereal will__ and the quantity sold of store brand cereal will _.