Use the figure below to answer the following questions. Figure 9.3.4
Original equilibrium at A,new equilibrium at B
-Refer to Figure 9.3.4.Which graphs show the case where good Y is an inferior good?
A)(a)and (b)
B)(c)and (d)
C)(a)and (c)
D)(b)and (d)
E)none of the graphs

Question

Use the figure below to answer the following questions.  Figure 9.3.4
Original equilibrium at A,new equilibrium at B
-Refer to Figure 9.3.4.Which graphs show the case where good Y is an inferior good?
A)(a)and (b) 
B)(c)and (d) 
C)(a)and (c) 
D)(b)and (d) 
E)none of the graphs

Quizplus · Accepted Answer

In graphs (a) and (c), a decrease in income causes a shift from the original equilibrium at A to the new equilibrium at B with a decrease in the quantity demanded of good Y. This indicates that good Y is an inferior good, as the demand for it decreases with a decrease in income. Graphs (b) and (d) show normal goods, as a decrease in income leads to a decrease in demand for both X and Y, resulting in a shift to a new equilibrium point.

Use the Figure Below to Answer the Following Questions