An inferior good is one in which
a. the average consumer chooses not to consume.
b. the good is not equally valued by all consumers.
c. an increase in income increases consumption of the good.
d. an increase in income decreases consumption of the good.
Answer: d. an increase in income decreases consumption of the good.
You might also like to view...
Asymmetric information is a universal problem. This would suggest that financial regulations
A) in industrial countries are an unqualified failure. B) differ significantly around the world. C) in industrialized nations are similar. D) are unnecessary.
Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 5, Q = 125) and (L = 6, Q = 152). Then the marginal product of the 6th worker is
a. 25 units of output. b. 27 units of output. c. 37 units of output. d. 162 units of output.
Assume the MPC is 0.75, taxes increase by $100 billion, and government spending increases by $100 billion. Aggregate demand will
A. Increase by $100 billion. B. Decrease by $400 billion. C. Increase by $400 billion. D. Not change.
A. the production possibilities curves of such nations are more bowed out from the origin. B. the production possibilities curves of such nations have shifted inward. C. the production possibilities curves of such nations have shifted outward. D.
these nations are operating at some point outside of their production possibilities curves. A. have a less concave production possibilities curve. B. produce at some point closer to its production possibilities curve. C. be able to produce at some point outside of its production possibilities curve. D. produce more consumer goods and fewer investment goods.