Harry used to work in a launderette and earned $30 a day. After work, he normally had a chicken burger worth $5 at McDonalds. After his pay was lowered to $20 he would purchase a vegetable burger worth $3 instead of the $5 chicken burger. In this scenario, the vegetable burger is an example of a(n)
A. luxury good.
B. complement good.
C. inferior good.
D. normal good.
Answer: C
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Refer to Figure 18.2. The opportunity cost of producing spears in Macadamia is
A) 3/4 of a fishing pole. B) 5/6 of a fishing pole. C) 6/5 fishing poles. D) 4/3 fishing poles.
When talking about demand, price elasticity refers to the
a. price flexibility in response to demand changes. b. adaptability of suppliers to price changes. c. responsiveness of buyers to price changes. d. ability to stretch one’s budget by making wise choices.
Shoe-a-holic Cathy started her own line of custom made, hand embellished wedding shoes. She opened up her own shop paid $2500 in fixed licensing fee. She used about $3000 in raw materials and made $3500 . At the end of the first month, Carly, her sister
looked at her financials and told her that she was losing money and should shut down. Cathy is heartbroken. As an economics guru, what would you advise her to do?
When disposable income is 2,000, savings is
A. 1,000
B. 750
C. 500
D. 0