Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 4 - Part II - The Market Forces of Supply and Demand - Quick Check Multiple Choice - Page 86: 5

Answer

(A) Prices and quantities both rise.

Work Step by Step

Inferior goods, by definition, are goods whose quantity demanded decrease with increase in income. Thus, during recession when income decreases, the demand increases. Eg- Peanut butter or Ramen Noodles. When you have less money, instead of having expensive dinners, one would rather fill your stomach with cheap goods as one cannot afford anything else.
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