Asked by Madeleine Grace on Jul 12, 2024
Verified
An increase in income causes the demand of normal goods to _________ and the price of normal goods to
A) Increase;increase
B) Increase;decrease
C) Decrease;increase
D) Decrease,decrease
Normal Goods
Goods for which demand increases as the income of the buyer increases, and vice versa.
Income Increase
A rise in the amount of money received, especially on a regular basis, through work or investments.
- Identify the differences between typical and lower-quality goods, and understand how shifts in income levels influence their demand.
Verified Answer
GS
Gurpreet SinghJul 19, 2024
Final Answer :
A
Explanation :
An increase in income causes an increase in demand of normal goods as people have more money to spend. This increase in demand can lead to an increase in price due to limited supply and increased competition among consumers.
Learning Objectives
- Identify the differences between typical and lower-quality goods, and understand how shifts in income levels influence their demand.