Question

See Hint If your income increases by 8%, and your quantity demanded of vanilla ice cream decreases by 18%, then vanilla ice cream is a(n) Choose one: A. substitute. B. inferior good. C. necessity. D. luxury good.

Answer 1

Answer:

The correct answer is B

Explanation:

Inferior goods are those goods or kind of goods whose demand declines or decrease when the income of the person or customer increases or rises. In other words, it means that the inferior goods demand is inversely associate to the customer or consumer income.

So, in this case, the income rises by 8% and the quantity demanded for the ice cream declines or falls by 18%, then the vanilla ice cream would considered as the inferior good.