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    Question

    For Ram, coarse rice is an inferior good. This

    means
    A When price of coarse rice increase, consumption of coarse rice also increases Correct Answer Incorrect Answer
    B When Ram’s income decreases, his consumption of coarse rice increases Correct Answer Incorrect Answer
    C When price of coarse rice falls, consumption of coarse rice falls Correct Answer Incorrect Answer
    D Both (b) and (c) are true Correct Answer Incorrect Answer

    Solution

    An increase in income leads to decline in demand of an inferior good but a fall in price leads to decline in demand of an inferior good only when it is a giffen good as well. But all inferior goods are not giffen and the question only mentions inferior good. Therefor option b is correct.

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