Practice question · Sort into groups
Income rises across the economy. Sort each good by what happens to its demand.
Groups: Demand shifts right (normal good) · Demand shifts left (inferior good)
- Restaurant dinners
- Foreign holidays
- Instant noodles
- Fresh salmon
- Second-hand clothing bought out of necessity
Hints
- Ask whether people buy more of it or less of it as they get richer.
- Some goods are what people escape from once they can afford better.
Show the answer
Demand shifts right (normal good): Restaurant dinners, Foreign holidays, Fresh salmon
Demand shifts left (inferior good): Instant noodles, Second-hand clothing bought out of necessity
Why
Normal goods ride income upward; inferior goods are what people escape from when they can finally afford better.
Practise The Demand Curve
The app has 7 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on The Demand Curve
- Bread sales rise after a recession cuts household incomes. Does that break the law of demand?
- Match each determinant to the demand shift it causes for good X.
- Petrol prices double. What happens in the market for large SUVs?
- Which events shift the demand curve for cinema tickets to the right?
- At 5€, Ana buys 4 sandwiches a week, Ben buys 6, and Carla buys 2. Set the slider to the market quantity…