Homework Answers
Ans) 1) Normal good is one which is positively related with income. That is, as income increases, its demand increases and if income decreases, its demand decreases. Eg- expensive clothes, new car etc.
Inferior goods are those which are negatively (inversely) related with income. That is if income increases, their demand decreases and vice versa. Eg- used cars
Option d.
2) Complementary goods are those which are consumed together. For eg- tea and sugar, pen and ink, gasoline and car etc.
So, if price of complementary good increases, demand for the other good decreases and vice versa. For eg- if price of sugar increases, demand for tea will fall.
Option b.
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