Final answer:
When an individual's income decreases and demand for a good increases, the good is categorized as an inferior good.
Step-by-step explanation:
If an individual's income decreases and the demand for a particular good increases as a result, then it can be concluded that the good is an inferior good. This is based on the economic principle that an inferior good is one whose demand increases when consumer income decreases. Goods that follow the opposite pattern, where demand increases with an increase in income, are referred to as normal goods. In contrast, luxury goods are a type of normal goods that show an especially pronounced increase in demand as income rises. Goods that are consumed in place of another when conditions change, such as a price increase or a fall in consumer income, are called substitute goods. Therefore, in the scenario described, the correct categorization for the good in question is that of an inferior good.