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Questions
If the quantity demanded of commodity X decreases as the householder's income increases. What type of a commodity is X? Give an example.
How does an increase in income affect the demand for an inferior good?
Solution
If the quantity demanded of commodity X decreases as the householder's income increases, commodity X is an inferior good.
Inferior goods are those for which demand decreases as consumers' income increases. As people earn more, they tend to buy less of the inferior good and more of higher-quality or more expensive substitutes.
Example:
Instant Noodles: For some consumers, instant noodles might be considered an inferior good. When their income increases, they may purchase fewer instant noodles and instead buy more fresh or higher-quality food options.
RELATED QUESTIONS
What will be the impact of a rise in price on the demand for its complementary goods?
Which of the following pairs of goods are most likely substitutes?
If due to fall in the price of good X, demand for Y rises, the two goods are ______.
The demand for a Good X increases when the price of its substitute ______ OR when the price of its complements ______.
Mobile phones and SIM cards are examples of ______.
Assertion (A): The statement 'A consumer buys 2 litres of milk everyday at a price of ₹50 per litre of milk' is demand statement.
Reason (R): The demand for a commodity is always expressed with references to price and time.
From the set of statements given in Column I and Column II, choose the correct pair of statements:
| Column I | Column II |
| A. Normal goods | (i) Goods the demand for which tends to fall with increase in income. |
| B. Inferior goods | (ii) Goods which cannot be used in place of one another. |
| C. Substitute goods | (iii) Goods which can be used in place of one another. |
| D. Joint demand | (iv) Goods the demand for which rise with increase in income. |
What are inferior goods?
What do you mean by substitute goods?
If price of X increases, then demand for Y too increases. What is the relationship between goods X and Y? Give an example.
With the help of a suitable example explain the effect of a rise in price on the demand for complementary goods.
Explain how quantity demanded for commodity X will be affected by Consumer credit facility.
What do you mean by a normal good?
What are Veblen goods?
Given an example of Veblen goods.
Detergent powder and detergent cake are examples of ______.
