Peter's income increases and so does his consumption of both movies and pop,but his consumption of pop increases by less than his consumption of movies increases.Which one of the following statements is true for Peter?
A)A movie is an inferior good;pop is a normal good.
B)A movie is a normal good;pop is an inferior good.
C)A movie is an inferior good;pop is an inferior good.
D)Movies and pop are both normal goods.
E)A movie is a normal good;we cannot tell whether pop is a normal good or an inferior good.

Question

Quizplus · Accepted Answer

When an individual's income increases and they consume more of both goods, it indicates that both goods are normal goods. Inferior goods would see a decrease in consumption with an increase in income.

Peter's Income Increases and So Does His Consumption of Both