Question

An inferior good is Multiple Choice

Answer 1

Answer:

B. not accurately defined by any of these statements.

Explanation:

An inferior good is defined as one whose the quantity demanded decreases as the income of its consumers increases and vice versa.

Option A is incorrect because the income elasticity for inferior goods is negative and therefore, as the income of the consumers increases, the demand curve shifts to the left.

Option C is incorrect because an inferior good does not necessarily mean a fake good. A good can be inferior but yet meet all the standards for approval by the FDA.

Option D is incorrect. The price and quantity demand for inferior goods, just like normal goods do not vary directly. This is only applicable to luxurious goods.

None of the statements in A, C, and D accurately defined an inferior goods.

Hence, the correct option is B.

Answer 2

Answer:

B. not accurately defined by any of these statements.

Explanation:

Inferior goods are goods whose demand decreases as the consumers income increases. This is different for normal goods in that the more the consumer earns, the more he/she tends to buy.

As such, inferior goods are not necessarily goods that has not been approved by the Federal Food and Drug Administration.

For Inferior goods, prices and quantity demanded do not vary proportionately.

Furthermore, the demand curve for an inferior good shifts out (rightward) when income decreases and shifts in when income increases.