An Inferior Good Is

question 223

Multiple Choice

An inferior good is:

• A) any good of low quality.
• B) one that consumers buy less of at a higher price.
• C) one that consumers buy less of as their income rises.
• D) one that has few substitutes.
• E) any good made with inexpensive labor.

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Definitions:

Preferred Stock

A type of corporate ownership that ranks above common stock in terms of asset and earnings claims, typically carrying predetermined dividend payouts.

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation.

Market Price

The rate at which an asset or service is exchanged in a competitive marketplace.

Marginal Tax Rate

The tax rate incurred on an additional dollar of income, reflecting the rate applicable to the highest portion of an individual's or corporation's income.