Hamburger Is an Inferior Good

question 91

Multiple Choice

Hamburger is an inferior good.If the price of hamburger increases,

• A)the income effect on the demand for hamburger will reinforce the substitution effect
• B)the income effect on the supply of hamburger will reinforce the substitution effect
• C)the budget line will rotate outward
• D)the budget line will shift outwards
• E)the income effect on the demand for hamburger will offset,to some degree,the substitution effect

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Definitions:

Average Variable Cost

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

Marginal Product

The additional output resulting from using one more unit of a particular input, holding all other inputs constant.

Marginal Cost

The incremental cost associated with producing an extra unit of a product or service.

Average Total Cost

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