JAMB 2021 Economics · Question 34
If the price of a commodity falls and the quantity purchased does not rise, the commodity can be described as________
Options
- A.Scarce
- B.Normal
- C.Superior.
- D.Inferior
Answer: D. Inferior
Explanation written with AI and checked against the answer key
Step 1: Analyze the question The price of a commodity falls, but the quantity purchased does not rise. According to the law of demand, a fall in price should normally lead to a rise in quantity demanded. Here, that doesn't happen, so we need the term for a good that behaves this way.
Step 2: Explain the concept
- Normal good: Demand rises when income rises, and quantity demanded rises when price falls.
- Superior (luxury) good: Demand rises more than proportionately as income rises. It still obeys the law of demand, so a fall in price raises quantity demanded.
- Scarce good: Scarcity means limited supply relative to wants. It says nothing about how consumers respond to a price change.
- Inferior good: Demand falls when consumers' real income rises. A fall in price effectively raises real income, so consumers may switch to better alternatives and not buy more. This can even produce an upward-sloping demand curve (a Giffen good, the extreme case of an inferior good).
Step 3: Apply to the question A price fall increases real income. For a normal or superior good, the quantity bought would rise. Quantity bought not rising matches the behavior of an inferior good, where consumers don't increase their purchases, and may even reduce them, as their real income improves. Scarcity (A) has no direct link to this demand behavior.
Step 4: Answer The correct option is D. Inferior.
Tip: Link "inferior" with "income effect goes the opposite way." If a price drop (which acts like an income rise) does not raise purchases, think inferior good. For normal and superior goods, lower price means higher quantity demanded.
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