Question

As the average income in China continues to​ increase, we would expect the demand for beef to​ _______ and the demand for rice to​ _______. A. ​increase; increase because the demand for any good increases when income increases B. not​ change; not change because people need to eat regardless of their income C. increase if beef is a normal​ good; decrease if rice is an inferior good D. decrease if beef is a normal​ good; increase if rice is an inferior good

Answer 1

C. Increase if beef is a normal good; decrease if rice is an inferior good

The average income increasing means that each family in China is now making more money than they have in the past. Because of this, they will want to buy more high-quality and expensive goods because they are now able too. They will have a higher demand for beef (assuming it is a normal good) because it is more expensive and considered higher-quality than rice (assuming it is an inferior good). More people are now able to buy beef (demand increases) and less people will only be able to buy rice (demand decreases).