Kimberly decides to go back to college full time at the age of 30,and finds herself with a much lower income than she was earning before.Now that she has less income,she finds herself eating less steak and more pasta than ever before.We can conclude:
A) steak and pasta are both normal goods, because they are both food she eats regardless of her income.
B) steak and pasta are both inferior goods, because they are both food she eats regardless of her income.
C) pasta is an inferior good because her demand increased when her income went down.
D) steak and pasta are both inferior goods, because they are both food she eats regardless of her income; also, pasta is an inferior good because her demand increased when her income went down.

Question

Quizplus · Accepted Answer

The fact that Kimberly is consuming more pasta, a lower-priced alternative to steak, as her income decreases indicates that pasta is an inferior good in her case. The information provided does not necessarily suggest that steak is an inferior good, as Kimberly may simply prefer pasta to steak given her current budget constraints.

Kimberly Decides to Go Back to College Full Time at the Age