Table 10-2

Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.
-Refer to Table 10-2.Holding prices constant, when Keira's income changed from $18 to $23, her utility maximizing bundle changed.Based on your answers to her optimal choices at the two income levels, what type of goods are soup and sandwiches?
A)Soup is an inferior good and sandwiches are a normal good.
B)Soup is a normal good and sandwiches are an inferior good.
C)Both soup and sandwiches are normal goods.
D)Both soup and sandwiches are inferior goods.

Question

Table 10-2
  
Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.
-Refer to Table 10-2.Holding prices constant, when Keira's income changed from $18 to $23, her utility maximizing bundle changed.Based on your answers to her optimal choices at the two income levels, what type of goods are soup and sandwiches?
A)Soup is an inferior good and sandwiches are a normal good. 
B)Soup is a normal good and sandwiches are an inferior good. 
C)Both soup and sandwiches are normal goods. 
D)Both soup and sandwiches are inferior goods.

Quizplus · Accepted Answer

From Table 10-2, Keira's optimal choices at $18 income level are 3 cups of soup and 2 sandwiches. At $23 income level, her optimal choices are 4 cups of soup and 3 sandwiches. Since the quantity demanded for both goods increased with the increase in income, they are both normal goods. Therefore, choice C is the correct answer.

Table 10-2 Table 10-2 Above Shows Keira's Utility from Soup and Sandwiches