taste. Conversely, when income falls, the most typical reaction is to purchase less of both goods. As we defined

in the chapter on Demand and Supply and again in the chapter on Elasticity, we call goods and services normal

goods when a rise in income leads to a rise in the quantity consumed of that good and a fall in income leads to

a fall in quantity consumed.

However, depending on Kimberly’s preferences, a rise in income could cause consumption of one good to

increase while consumption of the other good declines. A choice like P means that a rise in income caused her

quantity consumed of overnight stays to decline, while a choice like Q would mean that a rise in income caused

her quantity of concerts to decline. Goods where demand declines as income rises (or conversely, where the

demand rises as income falls) are called “inferior goods.” An inferior good occurs when people trim back on a
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