If Macaroni and Cheese Is an Inferior Good, an Increase

question 460

Multiple Choice

If macaroni and cheese is an inferior good, an increase in income will

• A) not affect the demand for macaroni and cheese.
• B) decrease the demand for macaroni and cheese.
• C) increase the demand for macaroni and cheese.
• D) create no income effect.

---

Definitions:

Price Elasticity

An indicator of the sensitivity of the demand for a product to variations in its price.

Perfectly Inelastic

A situation where the demand for a product does not change in response to changes in price, illustrated by a vertical demand curve.

Heart Transplants

A medical procedure involving the replacement of a patient's diseased heart with a healthy heart from a donor.

Price Elasticity

A measure of the sensitivity of the quantity demanded or quantity supplied of a good to a change in its price.