Question
Distinguish between normal goods and inferior goods.

Answer

A good whose demand increases with increase in consumer's income (and decreases with fall in income) is called a normal good.
Inferior good is any good whose demand falls as the consumer's income increases, and as the consumer's income decreases, the demand for it rises.
Example: Toned milk

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free