When Ryan has an income of $2,000, he consumes 30 units of good A and 50 units of good B. After Ryan’s income decreases to $1,500, he consumes 23 units of good A and 55 units of good B. Which of the following statements is correct?
a. Good A is a normal good, and good B is an inferior good.
b. Both goods A and B are inferior goods.
c. Both goods A and B are normal goods.
d. Good A is an inferior good, and good B is a normal good.
a. Good A is a normal good, and good B is an inferior good.
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Which of the following would be an example of contractionary fiscal policy?
A. Congress enacts economic sanctions on North Korea. B. Congress increases the corporate tax rate by 3 percent. C. Congress decreases the rate for the top income tax bracket by 5 percent. D. Congress increases infrastructure spending by 2 percent.
Because government bodies have the power to impose limits on how much of a resource is consumed:
A. it will always cause deadweight loss. B. they decide what is the "right" amount for the public to consume. C. it can be efficiency enhancing in markets for common resources. D. they will often correct a market before testing the effectiveness of social norms to correct the problem.
At the start of cost-push inflation...
What will be an ideal response?
In a budget line, an increase in income is represented graphically by:
A. a rightward parallel shift of the budget line. B. a change in the slope of an indifference curve. C. a leftward parallel shift of the budget line. D. a change in the slope of the budget line.