[amp_mcq option1=”e < 1\" option2=\"inferior goods\" option3=\"taste for it is declining\" option4=\"it is being produced under conditions of decreasing cost\" correct=\"option2\"]<\/p>\n
The correct answer is: B. inferior goods<\/strong>.<\/p>\n An inferior good is a good whose demand decreases as income increases. This is because consumers tend to substitute other, more desirable goods for inferior goods as their income rises.<\/p>\n For example, if a person’s income increases, they may be less likely to buy rice and beans, which are considered inferior goods, and more likely to buy steak and lobster, which are considered superior goods.<\/p>\n In the case of an inferior good, total consumer expenditure on the good will fall as its price falls. This is because consumers will be less likely to buy the good as its price falls, since they will be able to afford other, more desirable goods.<\/p>\n Option A is incorrect because it is possible for total consumer expenditure on a good to fall even if the good is a normal good. This can happen if the good’s price falls by a large enough amount.<\/p>\n Option C is incorrect because taste for a good can decline for a variety of reasons, including changes in income, changes in preferences, and changes in the prices of other goods.<\/p>\n Option D is incorrect because it is possible for a good to be produced under conditions of decreasing cost even if total consumer expenditure on the good falls. This can happen if the good’s production technology improves.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”e < 1\" option2=\"inferior goods\" option3=\"taste for it is declining\" option4=\"it is being produced under conditions of decreasing cost\" correct=\"option2\"]\n<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-53547","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n