If your income rises by one percent and, as a result, you buy more steak, then steak is a(n)
A) substitute.
B) normal good.
C) complement.
D) inferior good.

Question

Quizplus · Accepted Answer

When the income of a person increases, they usually have more disposable income, which they can spend on goods and services. If the person chooses to buy more of a particular good, it can be classified as a normal good. Since steak is a luxury good and people tend to buy more of it when they have more money, it can be classified as a normal good.

If Your Income Rises by One Percent And, as a Result