Answer:
The answer is b) negative, so Joan considers hamburger to be an inferior good.
Explanation:
Le re-visit the concepts of inferior goods and normal goods before we applying them to answer the questions.
* Inferior goods are goods whose demand increases when consumer's incomes declines which is because these goods are considered to be more affordable, yet, more economical than normal goods.
* Normal good offers more values/pleasures than inferior goods. As a result, once consumers incomes increases, demand for normal goods will be increased subsequently.
In the question, Joan income has decreased and her hamburger demand has decreased. This can be interpreted as hamburger is a inferior goods which is cheaper and thus Joan substitutes hamburger for other normal goods ( such as pizza, proper meal at local food stall).
As a result, b is the correct answer.
The question is about elasticity of demand
Joan bought 50 pounds of Hamburger when her household income was $40,000
While she bought 60 pounds of Hamburger when her household income was $30,000.
This pattern suggests that Joan considers Hamburger a necessity and increasing the consumption even when her household income is reducing
Hamburger is an inferior good but Joan is taking an inverse i.e negative effect.
Therefore the correct answer to the given question is B. Negative, so Joan considers hamburger to be an inferior good.
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