Suppose an Individual Experiences a Permanent Increase in Income

question 48

Multiple Choice

Suppose an individual experiences a permanent increase in income. As a result of this increased income, further assume that the individual eats dinner at restaurants more frequently each month. This information suggests that dinners at restaurants for this individual are

• A) an inferior good.
• B) a substitute good.
• C) a normal good.
• D) both complimentary and inferior.

---

Definitions:

Benchmarking

A systematic approach to identifying the activities with the greatest room for improvement. It is based on comparing the performance in an organization with the performance of other, similar organizations known for their outstanding performance.

Business Process

A series of steps that are followed to carry out some task in a business.

Output Capacity

The maximum amount of goods or services a company can produce in a given period under normal working conditions.

Maximum Weekly Output

The highest quantity of goods or services that can be produced or delivered by a company or facility in a week, given resource and operational constraints.