Joe consumes 10 units of food and 12 units of clothing. Since food is an inferior good, a gift to Joe of a $12 gift certificate at a clothing store will:
A) induce Joe to eat more than 10 units of food.
B) definitely make Joe better off than a gift of $12 in cash.
C) definitely make Joe worse off than a gift of $12 in cash.
D) None of the statements is correct.

Question

Quizplus · Accepted Answer

The Answer of Joe consumes 10 units of food and 12 units of clothing. Since food is an inferior good, a gift to Joe of a $12 gift certificate at a clothing store will:
A) induce Joe to eat more than 10 units of food.
B) definitely make Joe better off than a gift of $12 in cash.
C) definitely make Joe worse off than a gift of $12 in cash.
D) None of the statements is correct.

Joe Consumes 10 Units of Food and 12 Units of Clothing