Refer to the accompanying figure.  Suppose that James' initial budget constraint shifts from BC1 to BC2, and as a result, his best affordable bundle moves from point A to point B. According to this figure:

A. potatoes are an inferior good.
B. spinach is an inferior good.
C. spinach and potatoes are complements.
D. spinach and potatoes are substitutes.


Answer: D

Economics

You might also like to view...

If a firm faces a price of $12 regardless of how many units it produces and the marginal cost is constant at $10 regardless of how many units it produces, then theoretically, the firm should never stop producing

Indicate whether the statement is true or false

Economics

Dumping refers to

A) exporting products that do not meet domestic safety standards. B) selling inferior products to unsuspecting consumers. C) illegally avoiding tariffs by selling products on the black market. D) selling a product for a price below its cost of production.

Economics

Common sense suggests (and macroeconomists agree!) that sustained economic growth over extended time periods is more important than the economy's short-term fluctuations

Why, then, do macroeconomists (and policymakers, and the general public) care so much about the business cycle?

Economics

What is the shape of average cost curve? Provide the reason for that particular shape

Economics