A product can be classified to be an inferior good if an increase in the income of buyers causes

Allison's Auto Art is a company that applies pinstripes to vehicles. Allison's cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service

For a total price of $175, Allison will apply a fancier 3-color pinstripe application to an automobile, a service that adds an additional $40 to the total cost of the package. Should Allison continue to offer the 3-color pinstripe application? A) No, her marginal benefit is less than her marginal cost. B) Yes, she still makes a profit by selling the 3-color application. C) yes, but only if she lowers the price of the 1-color application D) More information is needed for Allison to make this decision.

Other things equal, an increase in the tax on dividends is likely to result in all of the following EXCEPT:

A) higher expected return on bonds relative to stocks B) increased demand for bonds C) lower interest rates D) higher interest rates