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

question 94

Multiple Choice

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

• A) decrease the quantity demanded of the good.
• B) increase the demand for the good.
• C) cause the demand curve for the good to shift to the left.
• D) cause a movement down along the demand curve.

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Definitions:

Actual Production

The actual quantity of goods or services produced by a company during a specific period.

Normal Production

Denotes the expected volume of production achieved under standard operating conditions, without unusual increases or decreases.

Materials Price Variance

The difference between the actual cost of materials and the expected cost, indicating how effectively a company is managing its raw material costs.

Accounts Payable

The amount a company owes to its suppliers or creditors for goods or services received that have not yet been paid for.