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Questions
With an increase in income, the consumption of which good, the consumer reduces ______.
With an increase in income, the consumption of which good reduces?
Options
Inferior good
Normal goods
Both (a) and (b)
Neither (a) nor (b)
Solution
With an increase in income, the consumption of which good, the consumer reduces inferior good.
Explanation:
As income increases, consumers typically reduce their consumption of inferior goods because they can now afford to purchase higher-quality or more expensive alternatives (normal goods).
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| 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. |
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