Consider a world that produces just two goods. Which of the following statements is correct? If...
Consider a world that produces just two goods. Which of the following statements is correct?
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If one good is inferior, the other must be normal.
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Both goods must be inferior.
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Both goods must be normal.
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If one good is normal, the other must be inferior.
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It is not possible to determine whether the goods or normal or inferior without additional information.
Homework Answers
ANSWER:
The correct answer is option e that is It is not possible to determine whether the goods or normal or inferior without additional information.
as inferior goods are those goods whose demand decreases with rise in income and vice versa while normal goods are those goods whose demand increases with rise in income and vice versa and so if there is no information regarding the income and quantity demanded , one cannot tell about the types of goods.
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