Max is shopping for a new winter jacket.The salesperson explains that two coats have identical features-the Columbia jacket that costs $120,and the Burton jacket that costs $300.Max buys the Burton jacket.Burton jackets may be a good example of:
A) a normal good.
B) an inferior good.
C) a Veblen good.
D) a Giffen good.

Question

Quizplus · Accepted Answer

Veblen goods are luxury goods that have a higher demand as their prices increase because they are associated with high status and prestige. The Burton jacket may be considered such a good, as its higher price may signal to others that the wearer is able to afford a luxury item.

Max Is Shopping for a New Winter Jacket