If Macaroni and Cheese Is an Inferior Good,then a Decrease

question 82

Multiple Choice

If macaroni and cheese is an inferior good,then a decrease in income results in

• A) an increase in the demand for macaroni and cheese.
• B) a decrease in the demand for macaroni and cheese.
• C) an increase in the supply of macaroni and cheese.
• D) a decrease in the supply of macaroni and cheese.
• E) Both answers A and D are correct.

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Definitions:

Net Income

The final earnings of a corporation once expenses and taxes are subtracted from its gross income.

Income Summary Account

An account used in the closing process to summarize the results of all revenue and expense accounts.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by an organization to fund its operations and grow.

Revenue Account

An account that records the income generated from selling goods or providing services, which contributes to a company's gross income.