If a good is normal, then an increase in income will result in A. a downward movement along the demand curve B. a decrease in the demand for the good C. an increase in the demand for the good D. an upward movement along the demand curveReset Selection
Question
If a good is normal, then an increase in income will result in A. a downward movement along the demand curve B. a decrease in the demand for the good C. an increase in the demand for the good D. an upward movement along the demand curveReset Selection
Solution
To determine the correct answer, let's analyze the characteristics of a normal good and the effects of an increase in income on its demand.
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Definition of a Normal Good: A normal good is one for which demand increases as consumer income rises. Conversely, demand for a normal good decreases when consumer income falls.
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Impact of Income Increase: When consumer income increases, the purchasing power of consumers also increases. For normal goods, this leads to an increase in the quantity demanded at each price level.
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Demand Curve Analysis:
- Downward Movement Along the Demand Curve (Option A): This would imply a decrease in the price of the good, leading to an increase in quantity demanded. However, the question specifies an increase in income, not a change in price.
- Decrease in Demand for the Good (Option B): This is incorrect because an increase in income leads to an increase, not a decrease, in demand for a normal good.
- Increase in the Demand for the Good (Option C): This is correct because an increase in income results in a higher demand for normal goods.
- Upward Movement Along the Demand Curve (Option D): This would imply an increase in the price of the good, leading to a decrease in quantity demanded. Again, the question specifies an increase in income, not a change in price.
Therefore, the correct answer is:
C. an increase in the demand for the good
Similar Questions
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