Alan purchases 10 per cent fewer bags of corn chips when his income decreases by 5 per cent. Based on only this information, we know that for Alan
A) corn chips are a complement to salsa.
B) corn chips are an inferior good.
C) corn chips are a substitute for pretzels.
D) corn chips are a normal good.
E) the price of chips fell.

Question

Quizplus · Accepted Answer

The fact that Alan buys fewer corn chips when his income decreases indicates that corn chips are a normal good for him, as consumption decreases with a decrease in income.

Alan Purchases 10 Per Cent Fewer Bags of Corn Chips