Table 6.2 Table 6.2 above shows Keira's utility from soup and sandwiches.The price of soup is $2 per cup and the price of a sandwich is $3.Keira has $18 to spend on these two goods.
-Refer to Table 6.2.Holding prices constant, when Keira's income changed from $18 to $23, her utility maximising bundle changed.Based on your answers to her optimal choices at the two income levels, what type of goods are soup and sandwiches?
A)Soup is an inferior good and sandwiches are a normal good.
B)Soup is a normal good and sandwiches are an inferior good.
C)Both soup and sandwiches are normal goods.
D)Both soup and sandwiches are inferior goods.

Question

Table 6.2  Table 6.2 above shows Keira's utility from soup and sandwiches.The price of soup is $2 per cup and the price of a sandwich is $3.Keira has $18 to spend on these two goods.
-Refer to Table 6.2.Holding prices constant, when Keira's income changed from $18 to $23, her utility maximising bundle changed.Based on your answers to her optimal choices at the two income levels, what type of goods are soup and sandwiches?
A)Soup is an inferior good and sandwiches are a normal good. 
B)Soup is a normal good and sandwiches are an inferior good. 
C)Both soup and sandwiches are normal goods. 
D)Both soup and sandwiches are inferior goods.

Quizplus · Accepted Answer

According to the table, as Keira's income changed from $18 to $23, her optimal bundle changed from (6 cups of soup, 2 sandwiches) to (8 cups of soup, 3 sandwiches). This indicates that both soup and sandwiches are normal goods because as her income increased, her consumption of both goods increased as well. Therefore, the answer is C, both soup and sandwiches are normal goods.

Table 62 Table 6