3. For most products, purchases tend to rise with increases in buyers\' incomes,
ID: 1104384 • Letter: 3
Question
3.
For most products, purchases tend to rise with increases in buyers' incomes, and to fall with decreases in buyers' incomes. Such products are known as:
A.
direct goods.
B.
normal goods.
C.
inferior goods.
D.
average goods.
4.
If an increase in consumer incomes causes the demand curve for product Z to shift to the left, then it can be said that product Z is a(n):
A.
inexpensive good.
B.
inferior good.
C.
normal good.
D.
luxury good.
3.
For most products, purchases tend to rise with increases in buyers' incomes, and to fall with decreases in buyers' incomes. Such products are known as:
A.
direct goods.
B.
normal goods.
C.
inferior goods.
D.
average goods.
Explanation / Answer
3 (b) The goods for which there is a direct relation between their demand and consumer incomes is called normal goods. For most products, purchases tend to rise with increases in buyers' incomes, and to fall with decreases in buyers' incomes. Such products are known as normal goods.
4 (b) The goods for which there is an indirect relation between their demand and consumer incomes is called inferior goods.If an increase in consumer incomes causes the demand curve for product Z to shift to the left, then it can be said that product Z is a(n): inferior good.