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)Both goods A and B are normal goods.
B)Both goods A and B are inferior goods.
C)Good A is a normal good, and good B is an inferior good.
D)Good A is an inferior good, and good B is a normal good.

Question

Quizplus · Accepted Answer

Good A is a normal good because Ryan consumes less of it when his income decreases. Good B is an inferior good because Ryan consumes more of it when his income decreases.

When Ryan Has an Income of $2,000, He Consumes 30