📚 Learning Guide
Inferior and Complementary Goods
easy

During an economic recession, Sarah notices that her family is buying more instant noodles instead of fresh produce. Which of the following best explains this behavior in terms of inferior goods?

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Choose the Best Answer

A

Instant noodles are an inferior good, so demand increases as incomes fall.

B

Fresh produce is a complementary good to instant noodles, causing the demand for noodles to rise.

C

Sarah's family prefers instant noodles because they are healthier than fresh produce.

D

Instant noodles are a substitute for fresh produce, leading to decreased demand for the latter.

Understanding the Answer

Let's break down why this is correct

Answer

During an economic recession, many families, including Sarah's, tend to buy more inferior goods. Inferior goods are items that people buy more of when their income decreases because they are cheaper alternatives to more expensive products. In Sarah's case, instant noodles are an example of an inferior good; they cost less than fresh produce and can be a quick meal option. As her family's financial situation becomes tighter during the recession, they may choose instant noodles to save money while still meeting their hunger needs. This behavior shows how economic conditions can influence consumer choices and spending habits.

Detailed Explanation

Instant noodles are considered inferior goods. Other options are incorrect because This answer suggests that fresh produce helps sell more noodles; This answer assumes that instant noodles are healthier, which is not true.

Key Concepts

Inferior Goods
Consumer Behavior
Complementary Goods
Topic

Inferior and Complementary Goods

Difficulty

easy level question

Cognitive Level

understand

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