An inferior good exhibits
A) a negative income elasticity.
B) a downward sloping Engel curve.
C) a decline in the quantity demanded as income rises.
D) All of the above.

Question

Quizplus · Accepted Answer

An inferior good is one in which as income rises, the demand for the good decreases. This negative relationship between income and quantity demanded is represented by a downward sloping Engel curve. Therefore, an inferior good exhibits all of the characteristics listed in choices A, B, and C.

An Inferior Good Exhibits