Economics (AS & A Level) · Oct / Nov 2021 · Paper 32 · Question 5
9708Indifference curves and budget lines
The diagram shows two indifference curves and two budget lines for goods X and Y. The consumer's initial equilibrium is point R. There is a shift in the budget line from Y1X1 to Y2X2 and the new equilibrium for the consumer is point S. What can definitely be concluded about good X?
- AIt is a Giffen good.
- BIt is an inferior good.
- CIt is a normal good.
- DIt is a public good.
As printed in the paper
Show the answer
Correct answer: B. It is an inferior good.
Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.