Question

Those goods the demand for which falls with increase in income and increases with fall in income of the consumer are called ______.

Options

• normal goods

• inferior goods

• necessities of life

• luxurious

Answer 1

Those goods the demand for which falls with increase in income and increases with fall in income of the consumer are called inferior goods.

Explanation:

Inferior goods are those goods for which demand decreases when income increases, and demand increases when income decreases. Consumers tend to replace inferior goods with better-quality (normal) goods as their income rises.