Abilene ECON 261 – Do you think that the increase in quantity
Subject: Economics   / General Economics
Question
The following table shows a demand schedule for a normal good:
Save your time!
- Proper editing and formatting
- Free revision, title page, and bibliography
- Flexible prices and money-back guarantee
Price
Quantity Demanded
23
70
21
90
19
110
17
130
a) Do you think that the increase in quantity demanded (say from 90 to 110 in the table) when price decreases (from $21 to $19) is due to a rise in consumers’ income? Explain clearly why or why not.
b) Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good?
c) Lastly, assume you do not know whether the good is normal or inferior. Devise and experiment that would allow you to determine which one it was. (Doesn’t have to be a feasible experiment.) Explain.
