Alan Purchases 10 Per Cent Fewer Bags of Corn Chips

question 64

Multiple Choice

Alan purchases 10 per cent fewer bags of corn chips when his income decreases by 5 per cent. Based on only this information, we know that for Alan

• A) corn chips are a complement to salsa.
• B) corn chips are an inferior good.
• C) corn chips are a substitute for pretzels.
• D) corn chips are a normal good.
• E) the price of chips fell.

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Definitions:

Customer Databases

Collections of information about customers, including their contact details, buying habits, and preferences, which companies use to manage customer relationships effectively.

Marginal Costs

The extra expense associated with the production of an additional unit of a product or service.

Average Cost

The total cost of production divided by the quantity of output produced, representing the per unit cost of production.

Signaling Mechanism

A method or action taken to convey information or intentions between parties, often used in economics and biology to indicate quality or status.