Consider a two good world, with commodities X and Y. If Y is an inferior good,...

Question

Question

Consider a two good world, with commodities X and Y. If Y is an inferior good, then an

increase in consumer income cannot

a. Decrease the demand for Y

B. Decrease the demand for X

c. Increase the demand for X

d. Make the consumer better of

business economics

Answer 1

Answer #1

Consider a two good world, with commodities X and Y. If Y is an inferior good, then an increase in consumer income cannot

Ans - B. Decrease the demand for X

Explanation:

If Y is an inferior good then it means with an increase in consumer income, demand of good Y falls.

And there are only 2 commodity X and Y, so the increase in income must lead to increase in demand of good X.

So, an increase in consumer income cannot decrease the demand for X

Answer 2

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