Consider the consumer only consumes two goods namely flour and potatoe

1.	Consider the consumer only consumes two goods namely flour and potatoes. Potatoes are aninferior good. Do you think that flour can also be inferior goods? Give your reviews. If the price of flour falls, illustrate the impact on the consumption of flour and potatoes using substitution effect and income effect
Answer» Explanation: An inferior good is a TYPE of good whose demand DECLINES when income rises. ... Therefore, he will switch his FLOUR demand from JOWAR to WHEAT. Hence jowar, whose demand has fallen due to an increase in income, is the inferior good and wheat is the normal good.

Consider the consumer only consumes two goods namely flour and potatoes. Potatoes are aninferior good. Do you think that flour can also be inferior goods? Give your reviews. If the price of flour falls, illustrate the impact on the consumption of flour and potatoes using substitution effect and income effect

Answer»

Explanation:

An inferior good is a TYPE of good whose demand DECLINES when income rises. ... Therefore, he will switch his FLOUR demand from JOWAR to WHEAT. Hence jowar, whose demand has fallen due to an increase in income, is the inferior good and wheat is the normal good.

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