Question

List two goods for which demand decreases when income goes up. What types of goods are these?

a) Normal goods
b) Inferior goods
c) Luxury goods
d) Complementary goods

Answer 1

Inferior goods are two goods for which demand decreases when income goes up. They are lower-quality or less expensive alternatives to other goods.

Step-by-step explanation:

A product whose demand decreases when income goes up is called an inferior good. These goods are typically lower-quality or less expensive alternatives to other goods. When people have more income, they tend to switch to higher-quality or more expensive alternatives, causing the demand for inferior goods to decline.

For example, generic brand groceries are often considered inferior goods. As income increases, people may choose to buy name brand groceries instead. Similarly, used cars are considered inferior goods, as people may opt for new cars when their income rises. Therefore, the two goods that decrease in demand when income goes up are inferior goods. They are different from normal goods, which experience an increase in demand as income rises.