Sarah gets a raise in pay of twenty percent.Before her raise,she purchased 5 kilograms of hamburger and 1 kilogram of steak a month.After her raise,she consumes 3 kilograms of steak and 2 kilograms of hamburger a month.If no other relevant influence has changed,we know that for Sarah

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When Sarah's income increases, she buys more steak and less hamburger. This indicates that steak is a normal good (consumption increases with income) and hamburger is an inferior good (consumption decreases with income).

Sarah Gets a Raise in Pay of Twenty Percent