Suppose that a student with a part-time job buys a backpack for $20. Upon graduation, they...
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Suppose that a student with a part-time job buys a backpack for $20. Upon graduation, they get a high-paying job and sell the backpack to buy a briefcase. We can say that the backpack is a/an ________ good
A) Inelastic
B) Elastic
C) Normal
D) Inferior
Homework Answers
Normal good is a good whose consumption rises with an increase in income and inferior goods are goods whose consumption decreases with the rise in income
As backpack consumption decreases with rise in income, therefore its an inferior good
option D is the correct answer
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