Question

Last year, Max bought 6 pairs of athletic shoes when his income was $35,000. This year, his income is $42,000, and he purchased 8 pairs of athletic shoes. Holding other factors constant, it follows that Max:___________.1. Considers athletic shoes to be inferior goods. 2. Has a low price elasticity of demand for athletic shoes. 3. Considers athletic shoes to be necessities. 4. Considers athletic shoes to be normal goods.

Answer 1

Answer:

4. Considers athletic shoes to be normal goods.

Explanation:

A normal good is a term used to describe a product or service whose demand increases as consumers' income increases. The quantity demanded of a normal good also increases if the economic conditions in a country improve.  Goods or services that consumers view to be of a high utility value adopts the behavior of normal goods.

Max considers athletic shoes as normal goods. He regards them to be of high utility value. An increase in income makes him buy more of the shoes. Normal goods are contrasted by inferior goods whose demand decline as people's incomes increase.