In the 1970s a typical college student's consumption might be represented by the following items: a small used car, black and white television set, macaroni and cheese and generic brand beer

As many of these students graduated from college what do you expect happened to the composition and quantity of the goods mentioned? Explain.


In all likelihood the consumption of these items either dropped off dramatically or disappeared altogether. The reason is that these items are what economists would classify as inferior goods. As these college students graduated and started to earn more income their demand for these goods fell. It is likely that the composition of goods in their bundle would move towards more normal goods.

Economics

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