If a Good Is Normal,then an Increase in Income Will

question 426

Multiple Choice

If a good is normal,then an increase in income will result in

• A) an increase in the demand for the good.
• B) a decrease in the demand for the good.
• C) a movement down and to the right along the demand curve for the good.
• D) a movement up and to the left along the demand curve for the good.

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Definitions:

Elastic Demand

A situation where the demand for a product or service significantly changes in response to a change in price, indicating consumers' sensitivity to price changes.

Inelastic Demand

A situation where the demand for a product or service remains relatively unchanged despite changes in its price.

Marginal Cost

The rise in aggregate expenditure resulting from the production of one more unit of a good or service.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded.