Suppose there are only two goods,A and B,and that consumer income is constant.If the price of good A falls and the consumption of good B rises,we can conclude that
A)both A and B are normal goods.
B)A is a normal good.
C)B is an inferior good.
D)B is a normal good.
E)A is an inferior good.

Question

Quizplus · Accepted Answer

If the consumption of good B rises as the price of good A falls, it implies that good B is a normal good. Since consumer income is constant and good B is a normal good, it cannot be an inferior good. We cannot conclude whether good A is a normal or inferior good from this information. Therefore, the answer is D) B is a normal good.

Suppose There Are Only Two Goods,A and B,and That Consumer