If a decrease in income leads to in a decrease in the demand for baked beans, then baked beans is:
A)a normal good.
B)a neutral good.
C)a complement.
D)a necessity.

Question

Quizplus · Accepted Answer

Baked beans are a normal good, meaning that as income decreases, the demand for it decreases as well. This is because people will have less money to spend on non-essential goods like baked beans. A neutral good does not have a change in demand with changes in income. A complement is a good that is typically consumed with another good (e.g. ketchup and hot dogs), and a necessity is a good that is essential for basic human needs (e.g. food, water, shelter).

If a Decrease in Income Leads to in a Decrease