Joe consumes 10 units of food and 12 units of…. store will

Managerial Economics

Joe consumes 10 units of food and 12 units of clothing. Since food is an inferior good, a gift to Joe of a $12 gift certificate at a clothing store will

Induce Joe to eat more than 10 units of food
Make Joe better off than a gift of $12 in cash
Make Joe worse off than a gift of $12 in cash
None of the statements associated with this question are correct

Note

Joe consumes 10 units of food and 12 units of clothing. Since food is an inferior good, a gift to Joe of a $12 gift certificate at a clothing store will induce Joe to eat more than 10 units of food.

Tags: The Theory of Individual Behavior

Note

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