Assume that an individual only consumes two goods: bread (B) and tea (T). Bread is a...
Assume that an individual only consumes two goods: bread (B) and tea (T). Bread is a normal good.
If tea also a normal good, an increase in income will lead to__________(larger/smaller) shifts in the demand for bread as compared to tea being
an inferior good.
Homework Answers
When the goods are normal then rise in income causes a large shift in the demand for goods like bread
But in the case of inferior goods, the rise in income causes no or very less effect on the demand
Here is the question if tea is inferior so there will be more demand for bread as compared to tea
so the answer is a larger shift
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