When an economy is in a recession, individuals taking a vacation are more likely to take car trips over airplane trips. The most reasonable explanation is ___________________________.

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

Air travel and car travel are complementary goods.

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

Air travel and car travel are both inferior goods.

1 answer

The most reasonable explanation is Air travel is a normal good and car travel is an inferior good.

In this context, when the economy is in a recession, individuals typically have tighter budgets and may forgo more expensive options like air travel (which is a normal good) in favor of cheaper alternatives like car trips (which can be considered as an inferior good).