Why would we see a decrease in demand for certain goods if incomes are rising in an economy? Веcause suppliers stop producing certain goods. when incomes are rising the demand for all goods increases. Thus, the statement is not true. some goods are inferior goods and consumers substitute normal goods for them when incomes are rising. when incomes are rising, people start saving more and reduce their consumption of all goods.

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter17: Capital And Time
Section: Chapter Questions
Problem 17.1P
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Why would we see a decrease in demand for certain goods if incomes are rising in an
economy?
Весause
suppliers stop producing certain goods.
when incomes are rising the demand for all goods increases. Thus, the statement is not true.
some goods are inferior goods and consumers substitute normal goods for them when incomes
are rising.
when incomes are rising, people start saving more and reduce their consumption of all goods.
Transcribed Image Text:Why would we see a decrease in demand for certain goods if incomes are rising in an economy? Весause suppliers stop producing certain goods. when incomes are rising the demand for all goods increases. Thus, the statement is not true. some goods are inferior goods and consumers substitute normal goods for them when incomes are rising. when incomes are rising, people start saving more and reduce their consumption of all goods.
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