Table of contents

1. Introduction to Macroeconomics1h 57m
2. Introductory Economic Models59m
3. Supply and Demand3h 43m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Price Floors3h 40m
6. Introduction to Taxes1h 25m
7. Externalities1h 3m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. Introducing Economic Concepts49m
11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)1h 37m
12. Unemployment and Inflation1h 15m
13. Productivity and Economic Growth1h 17m
14. The Financial System1h 37m
15. Income and Consumption52m
16. Deriving the Aggregate Expenditures Model1h 22m
17. Aggregate Demand and Aggregate Supply Analysis1h 18m
18. The Monetary System1h 1m
19. Monetary Policy1h 32m
20. Fiscal Policy1h 0m
21. Revisiting Inflation, Unemployment, and Policy46m
22. Balance of Payments30m
23. Exchange Rates1h 16m
24. Macroeconomic Schools of Thought40m
25. Dynamic AD/AS Model35m
26. Special Topics11m

3. Supply and Demand

Shifting Demand

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Multiple Choice

If cheese in a can is an inferior good, what happens to its market when consumer income increases?

Demand shifts to the left

Demand shifts to the right

Supply shifts to the left

Supply shifts to the right

Previous problem

Verified step by step guidance

Begin by understanding the concept of an 'inferior good'. An inferior good is a type of good for which demand decreases as consumer income rises, and conversely, demand increases as consumer income falls.

Identify the relationship between consumer income and the demand for inferior goods. When consumer income increases, people tend to buy less of the inferior good because they can now afford more expensive substitutes.

Apply this concept to the market for cheese in a can. Since it is classified as an inferior good, an increase in consumer income will lead to a decrease in demand for cheese in a can.

Visualize this change on a demand curve. A decrease in demand is represented by a leftward shift of the demand curve on a graph where the x-axis represents quantity and the y-axis represents price.

Conclude that when consumer income increases, the demand for cheese in a can shifts to the left, indicating a decrease in demand at each price level.