Question

For each example listed below, decide if the good is a normal good or an inferior good. Make sure you answer from the perspective of the individual (s) doing the buying or consuming.
Billy's mom increases his weekly allowance by $5. As a result, Billy increases the number of apps he downloads on his smartphone. Smartphone apps are a(n):
Susan gets a 15 percent performance bonus at work. She can finally stop eating so many frozen pizzas and eat something more tasty. Frozen pizzas are a(n)
Mike is an appliance salesman. Refrigerator sales in his store have fallen and so has commission. Mike to switch name brand cereal to generic cereal. Generic cereal is a(n):
Hair stylist molly loses a few of hor clients. Molly cuts back on the number of smoothies she buys during the week. are a(n);
Professor Jones is an oceanographer, she finds that college students eat less sushi when their income. Sushi is a(n)

Answer 1

Answer:

1. Smartphone apps are a normal good.

2. Frozen pizzas are an inferior good.

3. Generic cereal is an inferior good.

4. Smoothies are a normal good.

5. Sushi is a normal good if college students eat less of it when their income falls. But Sushi is an inferior good if college students eat less of it when their income rises.

Explanation:

Before answering the questions, it is important to first explain the meanings of normal good and inferior good.

A normal good is a good which it its demand rises when the income of the consumer rises. This also means that the demand for a normal good therefore falls when there is a fall in the income of the consumer. That is, there is a positive relationship between demand for a normal good and the income of the consumer.

An inferior good is a good that experiences an decrease in its demand when the income of the consumer increases. This also implies that the demand for the good increases when the income of the consumer falls. Therefore, there negative relationship between demand for an inferior good and the income of the consumer.

Inferior good is therefore an opposite of a normal good.

The questions are now answer as follows:

1. Billy's mom increases his weekly allowance by $5. As a result, Billy increases the number of apps he downloads on his smartphone.

This implies that Smartphone apps are a normal good. This is because the number of apps Billy downloads on his smartphone increases when his mom increases his weekly allowance.

2. Susan gets a 15 percent performance bonus at work. She can finally stop eating so many frozen pizzas and eat something more tasty.

This implies that Frozen pizzas are an inferior good. This is because Susan has decided to reduce the amount of frozen pizzas she eats due to a 15 percent performance bonus at work she gets which will increase her income.

3. Mike is an appliance salesman. Refrigerator sales in his store have fallen and so has commission. Mike to switch name brand cereal to generic cereal.

This implies that Generic cereal is an inferior good. This is because Mike has decided to increase the amount of Generic cereal he consumes because of a fall in his commission which his income making name brand cereal now expensive for him.

4. Hair stylist molly loses a few of her clients. Molly cuts back on the number of smoothies she buys during the week.

This implies that Smoothies are a normal good. This is because Molly reduces the number of smoothies she buys during the week due to a fall in her income caused by a loss of a few of her clients.

5. Professor Jones is an oceanographer, she finds that college students eat less sushi when their income falls/rises.

Sushi is will be a normal good if college students eat less of it when their income falls. However, Sushi will be an inferior good if college students eat less of it when their income rises.

I wish you the best.