Something Is a Normal Good If the Demand for the Good

question 59

Multiple Choice

Something is a normal good if the demand for the good

• A) increases as the consumer's income increases.
• B) increases as the consumer's income decreases.
• C) decreases if the price of a substitute good increases.
• D) increases if the price of a complement good increases.
• E) decreases as the income of the consumer increases.

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Definitions:

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization.

Consumer Surplus

The imbalance between the total budget consumers are willing to allocate for a product or service and the actual spending.

Consumer Surplus

The separation between the ideal amount consumers are willing to spend on a service or product and their real expenditures.

Producer Surplus

The discrepancy between what producers are ready to take for a product or service and the real amount they get.