Question 1 - MCQ Questions (1 Mark) - Chapter 1 Class 7 Economics - Introduction to Demand and Supply - Economics

Last updated at Dec. 13, 2024 by Teachoo

What is the term for a good that consumers buy more of when they have more money and buy less of when they have less money?

Answer:

So, the correct answer is option (A): normal good .

Let’s check all the options:

Option (A) Normal good - Normal goods are goods that have a positive relationship with income. This means that as income increases, the demand for normal goods also increases. Example of normal goods are Clothes , Furniture, Electronics, Travel , etc. This is the correct term for a good that consumers buy more of when they have more money and buy less of when they have less money. So, this is correct .
Option (B) Inferior good - This is the opposite term for a good that consumers buy less of when they have more money and buy more of when they have less money. Inferior goods are goods that have a negative relationship with income. For example, some inferior goods are Cheap food , Used cars , Public transportation So, this is incorrect .
Option (C) Substitute good - This is a term for a good that can be used instead of another good. Substitute goods are goods that have a negative relationship with the price of another good. For example, some substitute goods are: Tea or coffee , Coke or Pepsi . So, this is incorrect .
Option (D) Complement good - This is a term for a good that is used together with another good. Complement goods are goods that have a positive relationship with the price of another good. For example, some complement goods are: Bread and butter , Car and gas and Printer and ink. So, this is incorrect .