The difference between normal and inferior goods is that
a. normal goods are of better quality than inferior goods
b. an increase in price will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward
c. if the price of a normal good increases, individuals who buy it are poorer; for inferior goods, the opposite is true
d. an inferior good is something that will not be demanded until quantities of the normal good have been exhausted
e. an increase in income will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward
E
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The deadweight loss of a specific tax will be a small share of the tax revenue collected if:
A) supply is more inelastic than demand. B) demand is more inelastic than supply. C) supply and demand are both elastic. D) supply and demand are both inelastic.
What makes the demand curve of the perfectly competitive firm uniquely different from that of firms in other kinds of market structures?
Suppose Bianca buys a used a textbook from Sebastian for $55. If Bianca's surplus from this transaction was $10, we can infer that:
A. Bianca's reservation price was $60, and Sebastian's reservation price was $50. B. Sebastian's reservation price was $45. C. Bianca's reservation price was $65. D. Bianca's reservation price was $45.
In Table 10.1, what is the unemployment rate in Year 10?
A. .05 percent B. 10 percent C. 45 percent D. 50 percent