If Francis experiences a decrease in his income, we would expect that Francis's demand for
A) each good he purchases will remain unchanged.
B) normal goods will decrease.
C) most goods will increase.
D) inferior goods will decrease.

Question

Quizplus · Accepted Answer

If Francis experiences a decrease in his income, he will likely decrease his demand for normal goods as he has less purchasing power. However, his demand for inferior goods may increase as he may opt for cheaper alternatives. The statement "each good he purchases will remain unchanged" is not accurate as it depends on whether the good is normal or inferior. The statement "most goods will increase" is also not accurate without additional context.

If Francis Experiences a Decrease in His Income, We Would