Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 4 - Part II - The Market Forces of Supply and Demand - Questions for Review: 4

Answer

Since Popeye purchases more spinach as his income goes down, we know that spinach must be an inferior good for him. As a result of Popeye's income going down, his demand curve for spinach will shift to the right, meaning that he now desires a greater quantity of spinach at a given price than before.

Work Step by Step

In general, there are two types of goods in the context of income: normal goods and inferior goods. Normal goods are goods for which the demand increases as income increases, and vice versa. Inferior goods are goods for which the demand decreases as income increases, and vice versa. Since we know that Popeye purchases more spinach as his income goes down, spinach must be an inferior good for him. As a result, we know that his demand for spinach will increase (his demand curve will shift to the right) in response to his decrease in income.
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