Which of the following statements is false on theoretical grounds?
A)It is possible that all goods are normal.
B)It is possible that all goods are inferior.
C)It is possible that all goods are essential.
D)It is possible that all goods are inessential.

Question

Quizplus · Accepted Answer

On theoretical grounds, it is not possible that all goods are inferior. Inferior goods are those for which demand decreases as consumer income increases, implying that if all goods were inferior, an increase in income would lead to a decrease in demand for all goods, which is not feasible in an economy where typically, as income increases, demand for at least some goods (normal goods) increases.

Which of the Following Statements Is False on Theoretical Grounds