If an Individual's Income Increases, Then the Demand for a Normal

question 211

Multiple Choice

If an individual's income increases, then the demand for a normal good will:

• A) decrease.
• B) increase.
• C) remain constant.
• D) rotate.
• E) fall to zero.

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Definitions:

Marginal Cost

Marginal cost is the increase in total production cost that arises from producing one additional unit of a product or service.

Subsidy

A financial contribution granted by the government or a public body to help an industry or business keep the price of a commodity or service low.

Marginal Costs

The increase in cost resulting from the manufacture of one additional unit of a good or service.

Decreasing Costs

Situations in which costs diminish as the level of production or scale of operations increases.