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Qustion: what are definitions for a normal and inferior good? Give for each (an) example(s). Is...

Qustion: what are definitions for a normal and inferior good? Give for each (an) example(s). Is answer correct?

Normal good: A good for which an increase in income leads to an increase in demand, for example of normal goods such as apples, jeans, cars goods you can afford when your income goes up.

Iinferior good: A good for which, other things equal, an increase in income leads to a decrease in demand, for example, ramen noodles, fast-food, public transportation… what is the difference between normal and inferior goods? When income increases, demand for a normal good increases while demand for an inferior good decreases.

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Answer #1

Yes the answers are correct that Normal good is a good demand for which increases when income increases. For example: clothing, apples, potatoes etc. Note that, car is a luxury good which is also a normal good.

Inferior good is a good demand for which decreases when income increases. For example: public transportations.

The difference between normal and inferior goods are demand for normal good increases when income increases and demand for inferior goods decreases when income increases. Normal good is associated with positive income elasticity of demand and inferior good is associated with negative income elasticity of demand.

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