- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Topics in Demand and Supply Analysis
- Subject 3. Substitution Effect, Income Effect, Normal and Inferior Goods
CFA Practice Question
Which graph in the following figure best represents a good that is an inferior good at some income levels and a normal good at other income levels?
B. B
C. C
D. D
A. A
B. B
C. C
D. D
Correct Answer: A
User Contributed Comments 3
| User | Comment |
|---|---|
| nabilhjeily | please explain this one |
| gill15 | As income increases initially by looking at graph A you consume more of the good(definition of a normal good)and as income continues to increase you start consuming less of it (Inferior) |
| 3788wuz | inferior goods at one price level and normal goods at another price level indicating a change of direction as they have opposite reaction to increase in income. A is only graph with a change of rection. |