A Demand Curve for a Normal Good

question 451

Multiple Choice

A demand curve for a normal good

• A) slopes upward and to the right.
• B) is constructed based on the assumption that income is rising.
• C) is constructed based on the assumption that an inverse relationship exists between price and income.
• D) shows the inverse relationship between price and quantity demanded.

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Definitions:

Delay Gratification

The capacity to withstand the lure of an instant gratification in favor of a future, potentially more significant, reward.

Pocket Money

Typically refers to a small amount of money given by parents to their children on a regular basis to spend as they wish.

Allowance

A fixed amount of money given regularly, typically to children by their parents, as pocket money or for specific purposes.

Temporal Discounting

The tendency to value immediate rewards more highly than future rewards, often leading to impulsive decision-making.