Question

For each example listed, decide if the good is a normal good or an inferior good. Make sure you answer from the perspective of the individual or individuals doing the buying or consuming.

Billy's mom increases his weekly allowance by $ 55 . As a result, Billy increases the number of apps he downloads on his smartphone. Smartphone apps are:
Susan gets a 1515 percent performance bonus at work. She can finally stop eating so many frozen pizzas and eat something more tasty. Frozen pizzas are:
Mike is an appliance salesman. Refrigerator sales in his store have fallen and so has his commission. Mike decides to switch from name brand cereal to generic cereal. Generic cereal is:
Hair stylist Molly loses a few of her clients. Molly cuts back on the number of smoothies she buys during the week. Smoothies are

Answer 1

Smartphone apps are normal goods, frozen pizzas are inferior goods, generic cereal is a normal good, and smoothies are inferior goods.

Step-by-step explanation:

According to the information provided, we can determine if a good is a normal good or an inferior good by analyzing the relationship between income and quantity consumed.

1. When Billy's mom increases his allowance and Billy increases the number of apps he downloads on his smartphone, this suggests that smartphone apps are normal goods. As income rises, the quantity consumed of normal goods also increases.
2. When Susan gets a performance bonus at work and chooses to stop eating frozen pizzas in favor of something more tasty, this suggests that frozen pizzas are inferior goods. As income rises, the quantity consumed of inferior goods decreases.
3. When Mike, an appliance salesman, switches from name brand cereal to generic cereal because refrigerator sales in his store have fallen, this suggests that generic cereal is a normal good. As income falls, the quantity consumed of normal goods tends to increase.
4. When hair stylist Molly loses a few clients and cuts back on the number of smoothies she buys during the week, this suggests that smoothies are inferior goods. As income falls, the quantity consumed of inferior goods tends to increase.

Answer 2

Billy's mom increases his weekly allowance by $ 55 . As a result, Billy increases the number of apps he downloads on his smartphone.

If with increase in income demand increases, the good will be a normal good. Thus, apps that billy downloads are normal goods.

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: Inferior goods

Here with increase in income, the demand for a commodity falls, the so called commodity is a inferior good. Thus, in this case frozen pizzas are inferior goods.

Mike is an appliance salesman. Refrigerator sales in his store have fallen and so has his commission. Mike decides to switch from name brand cereal to generic cereal. Generic cereal is: Inferior goods

If there is a fall in income and thus demand increases, the good is inferior. Thus, in this case generic cereal is an inferior good.

Hair stylist Molly loses a few of her clients. Molly cuts back on the number of smoothies she buys during the week. Smoothies are: Normal goods

If there is a decrease in income and thus demand falls, the good is normal. Thus, smoothies as commodity in this case will be refereed to as normal goods.