If a good is an inferior good,then its
A) demand curve will be upward sloping.
B) income effect reinforces the substitution effect.
C) income elasticity is negative.
D) Engel curve cannot be drawn.

Question

Quizplus · Accepted Answer

An inferior good is a good whose demand decreases as consumer income rises. Thus, the income elasticity of demand for an inferior good is negative (-1 < elasticity < 0). Choices A and B are incorrect because an upward-sloping demand curve and the income effect reinforcing the substitution effect are characteristics of normal goods. Choice D is incorrect because an Engel curve can still be drawn for an inferior good, which shows the relationship between income and the quantity demanded of the good.

If a Good Is an Inferior Good,then Its