Joelle consumes food and clothing. For incomes near her current income, her income expansion path is negatively
Question:
Joelle consumes food and clothing. For incomes near her current income, her income expansion path is negatively sloped. Assume that food is measured along the horizontal axis and clothing is measured along the vertical axis.
Indicate whether each of the following statements is true or false, and provide a brief explanation why. (You may want to use a graph in your explanation.)
a. At current income levels, food must be an inferior good.
b. At current income levels, clothing must be an inferior good.
c. At current income levels, food and clothing must be inferior goods.
d. At current income levels, either food or clothing must be an inferior good.
Step by Step Answer:
Microeconomics
ISBN: 978-1464187025
2nd edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson