If a decrease in income leads to an increase in the demand for macaroni,then macaroni is
A)an inferior good.
B)a neutral good.
C)a necessity.
D)a normal good.

Question

Quizplus · Accepted Answer

An inferior good is a good for which there is an inverse relationship between income and demand. This means that as income decreases, the demand for the good increases. Since the question states that a decrease in income leads to an increase in the demand for macaroni, it must be an inferior good.

If a Decrease in Income Leads to an Increase in the Demand