Suppose Lisa spends her money on coffee and bagels

| November 24, 2016

Suppose Lisa spends her money on coffee and bagels, and a bagel is an inferior good for her. When the price of coffee increases, the…

a. Consumption of coffee will fall

b. Consumption of coffee will rise

c. Consumption of coffee will not change

d. No enough information

Scott consumers only two goods, rice and soup. When the price of rice falls, he buy more rice and more soup. Based on this information, we can say that…

a. rice is necessarily a normal good

b. rice is necessarily an inferior good

c. soup is necessarily a normal good

d. soup is necessarily an inferior good

e. none of the above

I think the first one is d and and the second one is a but I’m not sure at all and would really appreciate an explanation on how to do them. Thank you!

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