Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

"A good can be a normal good for the consumer at some levels of income and an inferior good for her at other levels of income."

Which of the following options is true in regards to the above statement?

Options:

The statement is true

The statement is false

May be the statement is true 

Maybe the statement is false

Correct Answer:

The statement is true

Explanation:

A good can be a normal good for the consumer at some levels of income and an inferior good for her at other levels of income. At very low levels of income, a consumer's demand for low quality cereals can increase with income. But, beyond a level, any increase in income of the consumer is likely to reduce her consumption of such food items as she switches to better quality cereals in order to increase her standard of living.