CIMA BA1 · Chapter 5 · Question 10 of 10
An inferior good is one for which:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Demand falls as consumers' incomes rise
Explanation
Income elasticity of demand for an inferior good is negative: as incomes rise, consumers switch to preferred alternatives. The term is an economic one and does not refer to product quality.
More Demand, supply and price determination MCQs
- Q2Which of the following would shift the demand curve for a normal good to the right?
- Q3Printers and ink cartridges are complementary goods. If the price of printers falls significantly, what is the likely effect in the market…
- Q4In a market, demand is Qd = 500 - 5P and supply is Qs = -100 + 5P, where P is price in $. What are the equilibrium price and quantity?
- Q5If the government imposes an effective maximum price below the equilibrium price, the most likely result is:
- Q6Using the market in which Qd = 500 - 5P and Qs = -100 + 5P, the government imposes a maximum price of $50. What is the resulting shortage?