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      Question

      In microeconomic theory, inferior goods exhibit which of

      the following relationships between income and quantity demanded?
      A Direct relationship Correct Answer Incorrect Answer
      B No change in demand with income Correct Answer Incorrect Answer
      C Inverse relationship Correct Answer Incorrect Answer
      D Unpredictable relationship Correct Answer Incorrect Answer
      E Positive correlation Correct Answer Incorrect Answer

      Solution

      Inferior goods have an inverse relationship with income. As income rises, demand for these goods falls, as consumers shift to better alternatives.

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