If macaroni and cheese is an inferior good,then
A)the income effect and the substitution effect work in opposite directions
B)as the budget line shifts to the right,consumers demand more macaroni and cheese
C)when the price of macaroni and cheese rises,the quantity demanded also rises
D)the quantity demanded rises as purchasing power rises
E)individuals will not consume macaroni and cheese

Question

Quizplus · Accepted Answer

According to the definition of an inferior good, as income rises, the demand for it decreases. This is because consumers switch to higher-quality goods as they can afford to do so. Therefore, the income effect and substitution effect work in opposite directions for inferior goods, with the income effect dominating.

If Macaroni and Cheese Is an Inferior Good,then