Questions: 20. An inferior good is one for which an increase in income causes a(n) a. increase in supply b. increase in demand c. decrease in demand d. decrease in supply

The answer is c: decrease in demand.

Explanation for each option:

a. Increase in supply: This is incorrect. Supply is not directly affected by changes in consumer income for inferior goods.

b. Increase in demand: This is incorrect. An increase in income typically leads to a decrease in demand for inferior goods, not an increase.

c. Decrease in demand: This is correct. Inferior goods are those for which demand decreases as consumer income increases, as consumers tend to buy more normal or superior goods instead.

d. Decrease in supply: This is incorrect. Supply is not directly related to changes in consumer income for inferior goods.

Summary: An inferior good is characterized by a decrease in demand when consumer income increases.