Kimberly decides to go back to college full time at the age of 30,and finds herself with a much lower income than she was earning before.Now that she has less income,she finds herself eating less steak and more pasta than ever before.We can conclude:
A)steak and pasta are both normal goods,because they are both food she eats regardless of her income.
B)steak and pasta are both inferior goods,because they are both food she eats regardless of her income.
C)pasta is an inferior good because her demand increased when her income went down.
D)Both b and c are true.

Question

Quizplus · Accepted Answer

Pasta is an inferior good because as her income decreased, her demand for pasta increased. This means that pasta is a good where people buy more of it as their income decreases. Since there's no information given about steak being an inferior or normal good, we cannot conclude that both are inferior goods, making choice D incorrect. A is also incorrect because while both are food, it doesn't necessarily mean that both are normal goods.

Kimberly Decides to Go Back to College Full Time at the Age