If the demand for sardines increases as income decreases, sardines areA.substitute good.B.inferior good.C.normal good.D.complementary good.
Question
If the demand for sardines increases as income decreases, sardines are
A. substitute good.
B. inferior good.
C. normal good.
D. complementary good.
Solution
Break Down the Problem
- Identify the relationship between demand and income.
- Determine the meaning of each type of good listed.
Relevant Concepts
- Inferior Good: A type of good whose demand increases when consumer income decreases.
- Normal Good: A type of good whose demand increases as consumer income increases.
- Substitute Good: Goods that can replace each other; if the price of one rises, the demand for the other increases.
- Complementary Good: Goods that are used together; if the price of one rises, the demand for the other decreases.
Analysis and Detail
- In this scenario, as income decreases, the demand for sardines increases. This indicates that consumers are opting for sardines when they have less income, which aligns with the definition of an inferior good.
Verify and Summarize
- Since higher demand for sardines occurs with lower income, it confirms that sardines are indeed an inferior good.
Final Answer
B. inferior good.
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