Final answer:
The situation where high-income individuals choose Lojack and lower-income individuals opt for the Club represents the economic concepts of normal and inferior goods. Lojack is a normal good with demand increasing with income, while the Club appears to be an inferior good, with demand decreasing as income rises.
Step-by-step explanation:
In the scenario where higher-income individuals select Lojack and lower-income individuals choose the Club, assuming all high-income individuals live in a certain neighborhood, the economic concept that best explains this situation is that of a normal good. Lojack, as chosen by higher-income individuals, is a normal good because its demand increases as income rises.
In contrast, the Club can be considered an inferior good since it is preferred by lower-income individuals, implying that its demand would decrease as income increases. This illustrates the relationship between income levels and demand for different goods, where normal goods are more in demand by those with higher incomes, reflecting their preference for higher quality or status-associated products.