The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income. Table 5.2
Based on the information given in Table 5.2, margarine is:
A)an inferior good.
B)a necessity.
C)a normal good.
D)a complementary good.
E)a luxury good.

Question

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income. Table 5.2
 Based on the information given in Table 5.2, margarine is:
A)an inferior good. 
B)a necessity. 
C)a normal good. 
D)a complementary good. 
E)a luxury good.

Quizplus · Accepted Answer

As Ted's income increases, the quantity of margarine he purchases decreases. This inverse relationship between income and quantity purchased suggests that margarine is an inferior good.

The Table Below Shows the Quantities of Automobiles, Margarine, and Coffee