Suppose Lisa spends all of her money on books and bagels,and a bagel is an inferior good for her.When the price of coffee increases,the
A)consumption of coffee will fall.
B)consumption of coffee will rise.
C)consumption of coffee will not change.
D)Not enough information.

Question

Quizplus · Accepted Answer

If bagels are an inferior good for Lisa, it means that as her income increases, she will consume fewer bagels. Therefore, when the price of coffee increases, Lisa is likely to substitute coffee for bagels, causing her consumption of bagels to fall and her consumption of coffee to rise.

Suppose Lisa Spends All of Her Money on Books and Bagels,and