Raj consumes only cheese and crackers.a. Could cheese and crackers both be inferior goodsfor Raj? Explain.b. Suppose that cheese is a normal good for Rajwhile crackers are an inferior good. If the price ofcheese falls, what happens to Raj’s consumptionof crackers? What happens to his consumption ofcheese? Explain

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Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.