If Pretzels Are a Normal Good, What Does the Income

question 109

Multiple Choice

If pretzels are a normal good, what does the income effect of a price change in pretzels mean?  

• A) As income increases, the quantity demanded increases along the demand curve for pretzels. 
• B) As income increases, the demand curve for pretzels shifts rightward. 
• C) As income increases, the demand curve for pretzels shifts leftward. 
• D) As the price of pretzels increases, the real income of individuals who demand pretzels decreases, so the quantity demanded of pretzels decreases.

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Definitions:

Distributor Storage

A logistic strategy where products are stored at distributor warehouses, allowing for quicker delivery to customers as compared to direct manufacturer shipments.

Product Variety

The range of different products or services offered by a company to meet diverse consumer needs.

Manufacturer Storage

A warehousing solution where the goods produced by a manufacturer are stored until they are shipped to the next link in the supply chain.

Direct Shipping

A distribution method where products are shipped directly from the supplier or manufacturer to the customer, bypassing intermediary storage or handling steps.