If the income-consumption path slopes down,then
A) Both goods are inferior
B) Both goods are normal
C) One good is normal and the other good is inferior
D) We can't tell anything about whether the goods are normal or inferior

Question

Quizplus · Accepted Answer

If the income-consumption path slopes down, one good must be inferior because the consumer purchases less of it as their income rises, indicating a decrease in its demand. The other good must be normal because the consumer purchases more of it as their income rises, indicating an increase in its demand. Therefore, only choice C is correct.

If the Income-Consumption Path Slopes Down,then