Economics Question Answer 2022

Running head: ECONOMICS
Economics
Name of the Student
Name of the University
Course ID

ECONOMICS1
Table of Contents
Module 1..........................................................................................................................................2
Question 1....................................................................................................................................2
Question 2....................................................................................................................................3
Module 2..........................................................................................................................................5
Question 1....................................................................................................................................5
Question 2....................................................................................................................................7
References........................................................................................................................................9

ECONOMICS2
Module 1
Question 1
Consumption choice of people is related to the level of income. People choose to various
types of good depending on income level. For this reason, income is considered as on important
determinant of demand. depending on the relation between income and demand goods are
classified into several categories. A normal good is one for which demand increases with rise in
income (Fine, 2016). There is another type of good which is related to low level of income. This
type of goods though is consumed when people earn a relatively low income, demand however
decreases as income increase. Goods for which demand decreases with growth in income is
known as inferior good.
Given the scenario, when the individual earns $250 per week, cheaper food option could
be noodle. Cheaper food in this case is an inferior good. Now if the same individual gets a better
employment and his income increase, he can go for better food option. Increase in income
increases affordability of the individual. As demand for better food option increases, demand for
noodle will decline.