MICRO 3 Flashcards
1
Q
What is a normal good?
A
A product is a normal good if an increase in income causes an increase in demand (similarly decrease income, decrease demand).
2
Q
What is an inferior good?
A
Opposite of a normal good, if income increases the demand decreases (and vice versa).
3
Q
What are some examples of normal goods?
A
Luxuries such as expensive cars, appliances, or clothing.
4
Q
What are some examples of inferior goods?
A
Necessities such as food and water.
