Question

If macaroni and cheese is an inferior good, then an increase in ____
(A) the price will cause the demand curve for macaroni and cheese to shift to the left.
(B) the price will cause the demand curve for macaroni and cheese to shift to the right.
(C) a consumer’s income will cause the demand curve for macaroni and cheese to shift to the left.
(D) a consumer’s income will cause the demand curve for macaroni and cheese to shift to the right.

Answer 1

Answer:

The correct answer is option C.

Explanation:

An inferior good is a good that has a negative income elasticity. It means that when consumer's income increases the demand for inferior goods decreases and vice versa.

If macaroni and cheese is an inferior good, then an increase in consumer's income will cause the demand for macaroni and cheese to decrease. This decrease in demand will cause the demand curve to shift to the left.