Question

When the economy turns down and the incomes of many people decrease, vacationers are more likely to take car trips than to fly. Which of the following provides one possible explanation for this phenomenon? a. Air travel and travel by car are complementary goods. b. Air travel and travel by car are both normal goods. c. Air travel is a normal good and travel by car is an inferior good. d. Air travel is an inferior good and travel by car is a normal good.

Answer 1

The answer is C.

Step-by-step explanation:

Air travel is a normal good and car is an inferior good

Normal goods are goods that their demand increases if there is an increase in income

While inferior goods are that their demand increases when there is a decrease in income.

The decrease in income experienced by vacationers made them to prefer travel by car. So car is an inferior good to them