If macaroni and cheese is an inferior good, then an increase in
a. the price will cause the demand curve for macaroni and cheese to shift to the left.
b. the price will cause the demand curve for macaroni and cheese to shift to the right.
c. a consumer’s income will cause the demand curve for macaroni and cheese to shift to the left.
d. a consumer’s income will cause the demand curve for macaroni and cheese to shift to the right.
The correct answer and explanation is :
The correct answer is:
d. a consumer’s income will cause the demand curve for macaroni and cheese to shift to the right.
Explanation:
An inferior good is a type of good for which demand increases as consumer income decreases, and demand decreases as consumer income increases. Macaroni and cheese is an example of an inferior good because people tend to buy more of it when they have less money (such as during economic downturns or personal financial strain) but may buy less when their income increases and they can afford higher-quality or more expensive foods.
Let’s break down the reasoning behind each option:
- Option a (the price will cause the demand curve for macaroni and cheese to shift to the left):
This statement is incorrect. A change in price does not shift the demand curve; instead, it causes movement along the demand curve. If the price increases, the quantity demanded of macaroni and cheese would decrease, but the demand curve itself doesn’t shift. - Option b (the price will cause the demand curve for macaroni and cheese to shift to the right):
This is also incorrect. The price change doesn’t shift the demand curve. As explained above, price changes cause movements along the demand curve, not shifts in it. - Option c (a consumer’s income will cause the demand curve for macaroni and cheese to shift to the left):
This is partially correct but only for normal goods. For normal goods, as income increases, demand decreases, which causes a leftward shift in the demand curve. However, macaroni and cheese, being an inferior good, does the opposite. - Option d (a consumer’s income will cause the demand curve for macaroni and cheese to shift to the right):
This is the correct answer because when a consumer’s income decreases, the demand for inferior goods like macaroni and cheese increases. Therefore, the demand curve shifts to the right as people buy more when they have less money.
In conclusion, for inferior goods, an increase in income leads to a decrease in demand, and a decrease in income leads to an increase in demand. The behavior of inferior goods contrasts with that of normal goods, which typically see an increase in demand as income rises.