4. Why would we see a decrease in demand for certain goods if incomes are rising in an economy? Because suppliers stop producing certain goods. when incomes are rising, people start saving more and reduce their consumption of all goods. some goods are inferior goods and consumers substitute normal goods for them when incomes are rising. when incomes are rising the demand for all goods increases. Thus, the statement is not true.
4. Why would we see a decrease in demand for certain goods if incomes are rising in an economy? Because suppliers stop producing certain goods. when incomes are rising, people start saving more and reduce their consumption of all goods. some goods are inferior goods and consumers substitute normal goods for them when incomes are rising. when incomes are rising the demand for all goods increases. Thus, the statement is not true.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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