New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    The goods for which demand increases proportionally less

    than income, are known as:
    A Normal Goods Correct Answer Incorrect Answer
    B Inferior Goods Correct Answer Incorrect Answer
    C Luxury Good Correct Answer Incorrect Answer
    D Necessity Goods Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    An inferior good is a good whose quantity demanded decreases when consumer income rises (or quantity demanded rises when consumer income decreases). In economics, a luxury good (or upmarket good) is a good for which demand increases more than proportionally as income rises Necessity Goods are those goods for which demand increases proportionally less than income Anormal goodis agoodor service that experiences an increase in quantity demanded as the real income of an individual or economy rises. Anormal goodis defined as having an incomeelasticityof demand coefficient that is positive but less than one. Agoodcan also be classified as a luxurygoodor inferiorgood.

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