A student at New York University used to take the Redhound bus when she visited her grandmother in Boston.After graduating,although the bus fare and the plane fare were the same as they were when she was a student,with a well-paid job on Wall Street she now takes the plane to Boston to visit her grandmother.For this student,travel by Redhound bus is
A) a normal good.
B) an inferior good.
C) a substitute good.
D) a complement good.
E) a good with negative preferences.

Question

Quizplus · Accepted Answer

An inferior good is a type of good for which demand decreases as income increases. In this case, the student used to take the Redhound bus when she had a lower income as a student, but now that she has a well-paid job, she chooses to fly instead. This indicates that the Redhound bus is an inferior good for this individual.

A Student at New York University Used to Take the Redhound