Answered: Sohail’s income declines and as a…

Sohail’s income declines and as a result, he buys more pumpkin juice. Is pumpkin juice an inferior or a normal good? What happens to Sohail’s demand curve for pumpkin juice?

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 4QR

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Concept explainers

Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.

Question

Sohail’s income declines and as a result, he buys more pumpkin juice. Is pumpkin
juice an inferior or a normal good? What happens to Sohail’s demand curve for
pumpkin juice?

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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