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JAMB Economics 1978 Question 6

Question 6

Theory of Demand

Inferior goods are defined in Economics as goods

  1. A.whose quality is low
  2. B.consumed by very poor people
  3. C.whose consumption falls when consumer income rises
  4. D.which satisfy only the basic needs
  5. E.none of the above.
Show the answer and explanation

Answer: C (whose consumption falls when consumer income rises)

Explanation

An inferior good is one people buy less of as their income rises, because they switch to better substitutes.