If a Consumer's Preferences for Two Goods, Say Food and Clothing

question 89

Multiple Choice

If a consumer's preferences for two goods, say food and clothing, are such that as income decreases, consumption of food increases but consumption of clothing decreases, we can say that:

• A)food and clothing are inferior goods.
• B)food is a normal good and clothing is an inferior good.
• C)food is an inferior good and clothing is a normal good.
• D)food and clothing are both normal goods.

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Definitions:

Halo Effect

The tendency to assume that a person has generally positive or negative traits as a result of observing one major positive or negative trait.

Fundamental Attribution Errors

The tendency to overemphasize personality-based explanations for behaviors observed in others while underemphasizing the role of situational factors.

Situational Attribution

Attributing a behavior to some external cause or factor operating within the situation; an external attribution.

Social Psychology

The scientific study of how individuals think, feel, and behave in social contexts.