When Joe's income is $100 per week,he spends $20 per week on pizza.When his income rises to $110 per week,he spends $25 per week on pizza.If the price of pizza remained constant during this time,this information implies that,for Joe:
A)pizza is a normal good.
B)pizza is an inferior good.
C)pizza is a substitute good.
D)demand for pizza is price-elastic.

Question

Quizplus · Accepted Answer

As Joe's income increases, he chooses to buy more pizza, indicating that pizza is a normal good for him. If pizza were an inferior good, Joe would buy less of it as his income increases. The information provided does not give any indication of whether pizza is a substitute good or whether the demand for pizza is price-elastic.

When Joe's Income Is $100 Per Week,he Spends $20 Per