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WAEC Economics 1993 Question 6

Question 6

Theory of Demand

An inferior good is one

  1. A.that is too bad for consumption
  2. B.whose price is lower than the prices of other goods
  3. C.that is easily perishable
  4. D.whose demand falls when the income of its consumers increases
  5. E.that is not durable.
Show the answer and explanation

Answer: D (whose demand falls when the income of its consumers increases)

Explanation

For an inferior good, people buy less as their income rises (they switch to better goods).