Asked by Prakruti Patel on Sep 23, 2024
Jim recently graduated from college.His income increased dramatically;from$5000 a year to $60,000 a year.Jim decides that instead of using the bus,he would buy a car.This implies that
A) The car is a normal goods for Jim
B) The car is an inferior goods for Jim
C) The bus and the car are complementary for Jim
D) Need information on the price of cars
Normal Goods
Goods for which demand increases as consumer income rises, and falls when consumer income decreases, opposite to inferior goods.
Inferior Goods
Goods whose demand decreases as the income of consumers increases, in contrast to normal goods.
Income
Income generated regularly from employment or investments.
- Understand the impact of income changes on the demand for goods.
Learning Objectives
- Understand the impact of income changes on the demand for goods.
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