Sia
Question
Statistics
Posted 6 months ago
Economists have observed that when average incomes increase, purchases of fast food tends to decline.
Based on this information, what can we definitely say about fast food?
Choose 1 answer:
(A) Demand for fast food is upward sloping
B) Fast food has no substitutes
(c) The price of a complement to fast food has risen
(D) Fast food is an inferior good
(E) Fast food is a normal good
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Answer from Sia
Posted 6 months ago
Solution by Steps
step 1
To address the question, we need to understand the definition of an inferior good in the context of economics. An inferior good is one for which demand decreases as income increases
step 2
The information given states that when average incomes increase, purchases of fast food tend to decline. This matches the definition of an inferior good
step 3
We can eliminate the other options as they do not describe the relationship between income and demand for fast food as stated in the question
Answer
D
Key Concept
Inferior Good
Explanation
An inferior good is a type of good for which demand decreases as the level of income or real GDP in the economy increases.
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