When Matt Has an Income of $2,000, He Consumes 30

question 542

Multiple Choice

When Matt has an income of $2,000, he consumes 30 units of good A and 50 units of good B. After Matt's income increases to $3,000, he consumes 25 units of good A and 95 units of good B. Which of the following statements is correct?

• A)Both goods A and B are normal goods.
• B)Both goods A and B are inferior goods.
• C)Good A is a normal good, and good B is an inferior good.
• D)Good A is an inferior good, and good B is a normal good.

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Definitions:

R&D Spending

Financial investments allocated towards research and development activities with the aim of advancing innovation, creating new products, or improving existing ones.

Imitation

The act of mimicking or replicating someone else's actions, strategies, products, or behaviors.

Innovative Product

A new or significantly improved good or service that offers unique benefits or solves problems in a novel way.

Brand-Name Recognition

The extent to which a consumer can accurately identify a brand based on visual or auditory cues.