Question

A student at New York University used to take the Redhound bus when she visited her grandmother in Boston. After graduating, although the bus fare and the plane fare were the same as they were when she was a student, with a well-paid job on Wall Street she now takes the plane to Boston to visit her grandmother. For this student, travel by Redhound bus is

Answer 1

Answer:

An inferior good.

Explanation:

Normal Good

This is simply known as goods whose demand increases as income of people rises and the demand falls also when there is a fall in income.

Inferior Good

This is simply known as goods that their demand reduced or decreases when the income of consumers do rises and also the demand also rises when consumer income falls. This is quite different fro. normal goods, for which the opposite is observed.

An increase in disposable income simply shows that the demand curve shifts rightwards and it depend largely o whether the goods is a normal goods or inferior goods.