Distinguish between a normal good and inferior good. Give example in e

1.	Distinguish between a normal good and inferior good. Give example in each case.
Answer» Solution :(i) Normal good are those goods whose DEMAND increases with an increase in income of the consumer and vice-versa whereas INFERIOR goods are those whose demand falls with an increase in income of the consumer and vice-versa. (ii) Income effect is POSITIVE in case of normal goods or there is a positive RELATIONSHIP between income and demand of the COMMODITY whereas income effect is negative in case of inferior goods or there is a negative relationship between income and demand of the commodity.

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