If less of a good is bought as one's income increases, such a good is

Step 1: Analyze the question The question describes what happens to the quantity bought when income rises. Here, income goes up and the quantity demanded goes down. This is about the relationship between income and demand, called income elasticity of demand.

Step 2: The concept

• Normal good: demand rises as income rises (positive income elasticity).
• Luxury good: demand rises more than proportionally as income rises (income elasticity greater than 1).
• Necessity: demand rises less than proportionally as income rises (income elasticity between 0 and 1).
• Inferior good: demand falls as income rises (negative income elasticity).

Step 3: Apply it The formula is:

YED = % change in quantity demanded ÷ % change in income

If income increases and less of the good is bought, the quantity change is negative, so YED is negative. Only an inferior good has a negative income elasticity.

Nigerian examples: as people earn more, they may buy less garri and more rice, or switch from "okada" to cars. Garri (in some households) and second-hand clothes (popularly called "okrika") are often treated as inferior goods.

Step 4: Eliminate the wrong options

• A. Normal good: demand rises with income, so this is wrong.
• B. Luxury: demand rises sharply with income, so this is wrong.
• C. Necessity: demand still rises slightly, or stays about the same, so this is wrong.
• D. Inferior good: demand falls as income rises, so this is correct.

Answer: D. an inferior good

Exam tip: Think of "inferior" as "income goes up, I buy less of it." Remember the sign of the income elasticity: positive means normal, negative means inferior.