Assume that commuters regard bus journeys as an inferior good and car journeys as a normal good.

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Assume that commuters regard bus journeys as an inferior good and car journeys as a normal good. Using indifference curves, show how 

(a) A rise in incomes and 

(b) A fall in bus fares will affect the use of these two modes of transport. How could people’s tastes be altered so that bus journeys were no longer regarded as an inferior good? If tastes were altered in this way, what effect would it have on the indifference curves?

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Related Book For  answer-question

Economics

ISBN: 978-1292187853

10th edition

Authors: John Sloman, Jon Guest, Dean Garratt

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