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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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