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A consumer at present consumes a commodi...

A consumer at present consumes a commodity which he finds inferior as his present income does not allow him to move to his demand for normal good. If he shifts to a higher income group what changes will take place? Explain using suitable diagram.

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With increase in his income, there will be two effects.
(a) His demand for inferior good will fall and the demand curve would shift to left. DD-`D_(2)D_(2)`

(b) His demand for normal good would rise and the demand curve will shift to the right.
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Directions In the following questions, read the passage carefully and choose the best answer to each question out of the four alternatives. PASSAGE STEM It is strange that, according to his position in He, an extravagant man is admired or despised. A suc cessful businessman does nothing to increase his popularity by being careful with his money. He is ex pected to display his success, to have a smart car, an expensive life, and to be lavish with his hospital ity. If he is not so, he is considered to mean and his reputation in business may even suffer in conse quence. The paradox remains that if he had not been careful with his money in the first place, he would never have achieved his present wealth. Among the two income groups, a different set of values ex ists. The young clerk who makes his wife a present of a new dress when he hadn't paid his house rent, is condemned as extravagant. Care fulness with money to the point of meanness is applauded as a virtue. Nothing in his life is considered more worthy than paying his bills. The ideal wife for such a man separates her housekeeping money into joyless little piles, and she is able to face the milkman with equanimity and never knows the guilt of buying something she can't really afford. How does the housewife, according to the writer, feel when she saves money?

Directions In the following questions, read the passage carefully and choose the best answer to each question out of the four alternatives. PASSAGE It is strange that, according to his position in He, an extravagant man is admired or despised. A successful businessman does nothing to increase his popularity by being careful with his money. He is expected to display his success, to have a smart car, an expensive life, and to be lavish with his hospitality. If he is not so, he is considered to mean and his reputation in business may even suffer in consequence. The paradox remains that if he had not been careful with his money in the first place, he would never have achieved his present wealth. Among the two income groups, a different set of values exists. The young clerk who makes his wife a present of a new dress when he hadn't paid his house rent, is condemned as extravagant. Care fulness with money to the point of meanness is applauded as a virtue. Nothing in his life is considered more worthy than paying his bills. The ideal wife for such a man separates her housekeeping money into joyless little piles, and she is able to face the milkman with equanimity and never knows the guilt of buying something she can't really afford. The phrase 'lavish with his hospitality' here means :