Inferior goods are affordable substitutes for more expensive goods. Which of the following is an example of someone purchasing an inferior good? Tom saved his money for an entire year so that he could buy the nicest car on the lot. Susan decided to buy her favorite pasta, rather than the store-brand pasta that she usually purchases. Sam had to stay within his budget, so he decided to buy generic toaster pastries instead of his favorite brand-name pastries. Jennifer earned a bonus at work, so she decided to go out to dinner at a fancy restaurant.

The objective of the question is to identify which of the given scenarios is an example of someone…

Answered: Inferior goods are affordable…

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter23: Price-searcher Markets With Low Entry Barriers

Section: Chapter Questions

Problem 3CQ

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Question

Inferior goods are affordable substitutes for more expensive goods. Which of the following is an example of someone purchasing an inferior good?

	Tom saved his money for an entire year so that he could buy the nicest car on the lot.
	Susan decided to buy her favorite pasta, rather than the store-brand pasta that she usually purchases.
	Sam had to stay within his budget, so he decided to buy generic toaster pastries instead of his favorite brand-name pastries.
	Jennifer earned a bonus at work, so she decided to go out to dinner at a fancy restaurant.