Matt graduates from college and gets a job paying $70,000 a year. While in school, he consumed 5 pounds of chicken and 10 pounds of shrimp a month. After he starts working, he consumes 4 pounds of chicken and 12 pounds of shrimp a month. If everything else is held constant, we know that
A) chicken and shrimp are normal goods for Matt.
B) chicken is an inferior good and shrimp is a normal good for Matt.
C) chicken is an inferior good for Matt.
D) shrimp is a normal good for Matt.

Question

Quizplus · Accepted Answer

When Matt's income increases, he buys less chicken and more shrimp. This indicates that he views chicken as an inferior good (buying less of it as his income increases) and shrimp as a normal good (buying more of it as his income increases).

Matt Graduates from College and Gets a Job Paying $70,000