Question

In case of inferior goods *

1. income effect is zero
2. none of these
3. income effect is positive
4. income effect is negative​

Answer 1

Answer:

income effect is positive

Answer 2

Answer:

An inferior good is one whose demand drops when people's incomes rise. When incomes are low or the economy contracts, inferior goods become a more affordable substitute for a more expensive good. Inferior goods are the opposite of normal goods, whose demand increases even when incomes increase.

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