The Difference Between Normal and Inferior Goods Is That

question 111

Multiple Choice

The difference between normal and inferior goods is that

• A) an increase in price will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward.
• B) if the price of a normal good increases, individuals who buy it are poorer; for inferior goods, the opposite is true.
• C) an inferior good is something that will not be demanded until quantities of the normal good have been exhausted.
• D) an increase in income will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward.

---

Definitions:

Efficient Tax System

A tax system designed to collect government revenue with minimal economic distortion and without imposing excessive administration and compliance costs.

Deadweight Losses

Economic inefficiencies that occur when equilibrium in a market is not achieved, often due to government intervention like taxes or subsidies.

Administrative Burdens

The costs and obstacles associated with compliance to governmental policies and regulations.

Economy's Income

The total value of all earnings obtained by individuals, businesses, and government entities within an economy over a specific period, often measured as Gross Domestic Product (GDP).