A product whose demand falls when income rises, and rises when income falls, is given what name for this kind of good?
AA normal good
BA substitute good
CAn inferior good
DA complement good
Answer & Solution
Correct answer: C. An inferior good
1. The definition ties demand directly to the direction of the income change.
2. When demand and income move in opposite directions, the good is inferior.
3. Generic groceries and used cars are examples where richer consumers buy relatively less.
4. Substitutes and complements describe relationships between two different goods, not a good's relationship to income.
_Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 3 "Demand and Supply", section 3.2 | Shifts in Demand and Supply for Goods and Services_
Keep practising Demand and Supply
Browse all Demand and Supply questions for AP Macroeconomics, or explore more Economics topics.
Related questions
Fix the aggregate demand slipWhat is the loss in total surplus that occurs when an economy produces at an inefficient qWhat hourly rate was the federal minimum wage set at, at the end of 2014?Golf clubs and golf balls are complements. If the price of golf clubs rises, what happens A product whose demand rises when income rises, and falls when income falls, is given what