Ramen noodles are a staple food item for many college students. Ramen noodles are very inexpensive, easy to prepare, and can be combined easily with other foods. After students graduate, find employment, and earn a higher income, they decrease their Ramen noodle purchases significantly. In this case, Ramen noodles are
A) a normal good.
B) an inferior good.
C) a complement for higher income people.
D) a substitute good.
E) None of the above answers is correct.
B
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What happens in the steady state to the capital—labor ratio, output per worker, and consumption per worker when each of the following events occur? You should assume that the steady-state capital—labor ratio is below the Golden Rule level
(a) Productivity falls. (b) Population growth falls. (c) The saving rate falls. (d) The depreciation rate falls.
If the price of airline travel in Europe falls and the demand for train travel in Europe also falls, then the two goods are
A) complements. B) normal goods. C) substitutes. D) inferior goods.
A risk averse individual
a. values a lottery at more than its expected value b. values a lottery at exactly its expected value c. values a lottery at less than its expected value d. tends to play lots of lotteries
Markets are primarily responsible for the rapid rise in productivity during the 20th century.
Answer the following statement true (T) or false (F)