Final answer:
The statement is true; as people become wealthier, they often prioritize purchasing higher quality goods over a larger quantity of goods, which is consistent with the economic definition of a normal good.
Step-by-step explanation:
The statement that on average over all goods, expenditures for higher quality grow more rapidly than expenditures for increased quantity as people become wealthier is generally true. This concept relates to the behavior of consumers in response to changes in their income levels and is captured in the definitions of normal goods and inferior goods. A normal good is one whose demand increases as income increases, which can include higher quality items such as luxury cars, vacations, or fine jewelry. As people's incomes rise, they tend to prefer purchasing better quality goods over simply more goods, hence they spend more on quality. This contrasts with inferior goods, whose demand decreases as income increases.
For example, people might buy fewer generic brand groceries but more name brand groceries as their incomes rise. The substitution of higher quality for increased quantity reflects a shift in preferences and consumer demand as people's financial circumstances improve. This shift is a well-documented phenomenon in economics and supports the observation that consumers prioritize quality over quantity with increased wealth.