Question : What will be the effect on inferior commodities when the income of the consumers rises?
Option 1: Negative effect
Option 2: Positive effect
Option 3: No effect
Option 4: First increase then decrease
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Correct Answer: Negative effect
Solution : The correct option is the Negative effect .
When people's incomes increase, the desire for lesser goods decreases. When the economy is weak or earnings are low, less-priced alternatives to more expensive things can be found. The term "inferior goods" might apply to a particular product brand, a specific item or even a specific instance of how something happens (such as riding a bus as opposed to driving a new automobile).
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Question : In the first month, the income of Mohan increased by 30%. In the second month, his income decreased by 30%. What will be the percentage increase or decrease in the income after two months?
Question : The ratio between monthly income and expenditure of Vaidic is 8 : 5. If his income increases by 20% and his expenditure increases by 30%, then find the percentage increase or decrease in his monthly savings.
Question : In the case of inferior good , the income elasticity of demand is :
Question : Water tax is increased by 20% but its consumption is decreased by 20%. Then, the increase or decrease in the expenditure of money is:
Question : The percentage change in a number when it is first decreased by 10% and then increased by 10% is:
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