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    Question

    For Ram, coarse rice is an inferior good. This means

    A When price of coarse rice increase, consumption of coarse rice also increases Correct Answer Incorrect Answer
    B When Ram’s income decreases, his consumption of coarse rice increases Correct Answer Incorrect Answer
    C When price of coarse rice falls, consumption of coarse rice falls Correct Answer Incorrect Answer
    D Both (b) and (c) are true Correct Answer Incorrect Answer

    Solution

    An inferior good is one where the demand increases as the consumer's income decreases, and vice versa. Statement (b) is true because if Ram's income decreases, he is likely to consume more coarse rice since it is an inferior good. Statement (c) is also true because when the price of coarse rice falls, typically the consumption of an inferior good might decrease as people switch to higher-quality substitutes. However, the question might be interpreting this as a general downward demand for the good when its price decreases. Therefore, both statements (b) and (c) together capture the essential characteristics of an inferior good in the context provided.

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