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JAMB Economics 1997 Question 14

Question 14

Theory of Demand

A good is said to be inferior if its demand

  1. A.rises as income rises
  2. B.falls as income rises
  3. C.rises as its price falls
  4. D.is perfectly inelastic.
Show the answer and explanation

Answer: B (falls as income rises)

Explanation

People buy less of an inferior good when their incomes rise because they switch to better goods.