When Celia has an income of $1,200, she consumes 30 units of good A and 55 units of good B. After Celia's income increases to $1,800, she consumes 15 units of good A and 70 units of good B. Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Good A is an inferior good because Celia consumes fewer units of it as her income increases (from 30 units to 15 units). Good B is a normal good because she consumes more of it as her income increases (from 55 units to 70 units).

When Celia Has an Income of $1,200, She Consumes 30