Suppose Betty spends her monthly allowance on buying computer games, watching movies, and parasailing.If an increase in her monthly allowance increases her expenditure on parasailing activities we can say that:

Question

Quizplus · Accepted Answer

When an increase in income leads to an increase in expenditure on a good or service, it is classified as a normal good. Here, an increase in Betty's monthly allowance leads to an increase in her expenditure on parasailing activities, indicating that parasailing is a normal good. The other options of inferior good do not fit the scenario described.

Suppose Betty Spends Her Monthly Allowance on Buying Computer Games