Barth Anderson states that the 2008 "downturn in the economy has really brought a lot of people home. They don't say, 'Well, we're going to order a pizza.' They actually cook." Assuming that restaurant meals and eating at home are substitutes for one another and only consumers' income decreases, what is TRUE?

Question

Quizplus · Accepted Answer

If the 2008 downturn in the economy has brought a lot of people home to cook, it implies that eating at home has become more popular or increased. This means that as income decreases, people are more likely to buy inferior goods (i.e., cheaper alternatives such as cooking at home) and less likely to buy normal goods (e.g., restaurant meals). Therefore, restaurant meals are a normal good and eating at home is an inferior good. Choice B states this relationship correctly.

Barth Anderson States That the 2008 "Downturn in the Economy