When Sam's annual income was only $15,000, he purchased 50 kilograms of bananas per year. When his income rose to $18,000, he purchased 55 kilograms per year. Therefore,
A) his income elasticity of demand for bananas is negative.
B) his income elasticity and price elasticity of demand for bananas are both greater than one.
C) for Sam, bananas are a normal good.
D) for Sam, bananas are an inferior good.

Question

Quizplus · Accepted Answer

The increase in quantity purchased of bananas with an increase in income indicates that bananas are a normal good for Sam, as he buys more of them when his income rises.

When Sam's Annual Income Was Only $15,000, He Purchased 50