If Joe's income increased and as a result he purchased more wine and less fast food,
A) wine is a normal good and fast food an inferior good for Joe.
B) wine is an inferior good and fast food a normal good for Joe.
C) both wine and fast food are inferior goods for Joe.
D) both wine and fast food are normal goods for Joe.

Question

Quizplus · Accepted Answer

When Joe's income increased, he purchased more wine, which is a higher quality and more expensive product than fast food. This suggests that wine is a normal good for Joe, while fast food is an inferior good that he purchases less of when his income rises.

If Joe's Income Increased and as a Result He Purchased