If an increase in income causes a decrease in the consumption of good Y,we know that good Y is:
A) a normal good.
B) a substitute.
C) a complement.
D) an inferior good.

Question

Quizplus · Accepted Answer

When an increase in income leads to a decrease in consumption of a certain good, it is known as an inferior good. It means that the good is not a luxury good but a necessity, and as income increases, people tend to switch to other substitutes, resulting in decreased demand for that good.

If an Increase in Income Causes a Decrease in the Consumption