If the Demand for Sardines Increases as Income Decreases, Sardines

question 104

Multiple Choice

If the demand for sardines increases as income decreases, sardines are a(n)

• A) normal good.
• B) inferior good.
• C) substitute good.
• D) complementary good.

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Definitions:

Income Effect

The change in an individual's or economy's consumption patterns due to a change in real income, reflecting how increases or decreases in income can affect buying habits.

Substitution Effect

The alteration in purchasing behavior caused by variations in the relative costs of products, prompting buyers to opt for less expensive alternatives over pricier ones.

Price Change

An adjustment in the cost of a good or service in the market, which can be an increase or decrease due to various factors.

Income

The remuneration accrued, notably in a recurrent manner, from labor or the investment of resources.