Describe whether the statements are true or false. Explain your answers:

1.) Your uncle is considering taking a two-week long cruise from Los Angeles to Alaska and back. The price of the cruise is $10,000, and this price is all-inclusive (i.e., it covers all expenditures for the whole two weeks: transportation from your uncle's house to the cruise ship, meals, entertainment, etc.). It is rational for your uncle to go on the cruise as long as the benefit that he derives from it is greater than $10,000.

2.) When the price of cereal decreased from $5 per box to $4 per box, this caused your neighbor's consumption of cereal to increase from 20 boxes per year to 30 boxes per year. If the substitution effect of this price decrease was responsible for increasing your neighbor's consumption by 10 boxes per year, then cereal must be an inferior good.