If Francis experiences a decrease in his income,then we would expect Francis's demand for

Question

Quizplus · Accepted Answer

When there is a decrease in income, people tend to buy fewer normal goods since they become relatively more expensive compared to their budget. Therefore, Francis's demand for normal goods may decrease. On the other hand, luxury goods are likely to be more sensitive to changes in income, and their demand may decrease as well. Inferior goods, which are cheaper alternatives to normal goods, may become more attractive to Francis, and their demand may increase. However, there is no information to suggest that Francis's demand for each good he purchases will remain unchanged.

If Francis Experiences a Decrease in His Income,then We Would