When Otto's income increases, he buys fewer frozen vegetables. Based on this, we can conclude that:
A) Otto is irrational.
B) Otto considers frozen vegetables to be inferior goods.
C) frozen vegetables are necessities.
D) frozen vegetables are luxuries.

Question

Quizplus · Accepted Answer

Inferior goods are those for which demand decreases as the consumer's income increases. Otto buying fewer frozen vegetables as his income increases indicates he sees them as inferior goods.

When Otto's Income Increases, He Buys Fewer Frozen Vegetables