Linesha, a university student working part-time, receives a wage increase.An avid movie buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs.Based on this information,
A)DVDs and Blu-ray discs are substitutes.
B)Blu-ray discs are normal goods and DVDs are inferior goods.
C)DVDs and Blu-ray discs are normal goods.
D)the cross-price elasticity between DVDs and Blu-ray discs is negative.

Question

Quizplus · Accepted Answer

Linesha's behavior suggests that with an increase in income, she buys more Blu-ray discs and fewer DVDs, indicating Blu-ray discs are normal goods and DVDs are inferior goods.

Linesha, a University Student Working Part-Time, Receives a Wage Increase