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The difference between an “inferior” good and a “normal” good in Economics is:
a. The demand for a normal good decreases as the price increases, which is not the case for an inferior good
b. The demand for a normal good increases as the price increases, which is not the case for an inferior good
c. The demand for a normal good decreases as household income increases, which is not the case for an inferior good
d. The demand for a normal good increases as household income increases, which is not the case for an inferior good
Consider the market for McDonald’s hamburgers in Moscow. What outcomes does the basic model of supply and demand predict in this market if Zip’s decides to lower the prices on all of their hamburgers?
a. Price and quantity of McDonald’s hamburgers will both decrease
b. Price and quantity of McDonald’s hamburgers will both increase
c. Price of McDonald’s hamburgers will increase, quantity will decrease
d. Price of McDonald’s hamburger will decrease, quantity will increase
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