Question

In: Economics

After getting a raise at work, Jennie now regularly buys steak instead of hamburger. Based on...

After getting a raise at work, Jennie now regularly buys steak instead of hamburger. Based on this behavior, we can assume:

Multiple Choice

  • steak is a normal good, and hamburger is an inferior good for Jennie.

  • steak is an inferior good, and hamburger is a normal good for Jennie.

  • steak and hamburger are complementary goods for Jennie.

  • steak and hamburger are normal goods for Jennie.

Solutions

Expert Solution

The correct answer is Option A
A normal good is a good whose demand increases along with an increase in income. Whereas an inferior good is a good whose demand will fall with an increase in income. Here Jennie, had a raise at her work, thus her income will be increased. Here after her raise at work, her demand for steak had increased and her demand for hamburger had fallen. Thus the steak is a normal good and the hamburger is an inferior good. A complementary goods which are consumed together. Here these are not a complementary goods


Related Solutions

Your life situation is affected by which of the following? Multiple Choice Buying a car Vacations Getting a raise at work Graduation Grades
Your life situation is affected by which of the following?Multiple ChoiceBuying a carVacationsGetting a raise at workGraduationGrades
Now, let’s calculate the least-squares line based on your data.  Show your work.    x y x2...
Now, let’s calculate the least-squares line based on your data.  Show your work.    x y x2 xy y2 1045 183 2266 283 584 163 444 205 2746 283 698 146 796 143 1304 223 2. Determine the Sample Correlation Coefficient, .
As an employee, $10 per month is deducted from your paycheck for life insurance--as it is for all 500 employees at the company where you work. After you retire, you decide to continue payments on your own. But you now must pay $250 a month (not $10).
Pick the correct analysis of the following example. As an employee, $10 per month is deducted from your paycheck for life insurance--as it is for all 500 employees at the company where you work. After you retire, you decide to continue payments on your own. But you now must pay $250 a month (not $10). this is an example when asymmetric information leads to prices that are too high because the buyer has less information than the seller this is...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT