An increase in the demand for a good quality steak, a normal good, can be caused by a/an:Group of answer choicesincrease in consumer income.increase in the price of tomato sauce.increase in the price of steak.decrease in consumer income.
Question
An increase in the demand for a good quality steak, a normal good, can be caused by a/an:Group of answer choicesincrease in consumer income.increase in the price of tomato sauce.increase in the price of steak.decrease in consumer income.
Solution
An increase in the demand for a good quality steak, a normal good, can be caused by an increase in consumer income.
Here's why:
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Normal goods are those goods for which demand increases when consumer income increases. This is because as consumers have more disposable income, they are more likely to spend on goods they perceive as high quality or luxury, such as a good quality steak.
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An increase in the price of tomato sauce or steak would not cause an increase in demand for steak. In fact, it could potentially decrease the demand as the good becomes more expensive.
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A decrease in consumer income would not lead to an increase in demand for a normal good. As income decreases, consumers typically cut back on their spending, particularly for goods that are not necessities.
So, the correct answer is "increase in consumer income".
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