ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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has not been damaged
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will be purchased, regardless of changes in income
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will be in higher demand if a person’s income increases
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will be in higher demand if a person’s income decreases
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Detailed explanation-1: -Normal goods are those whose demand increases as people’s incomes and purchasing power rise. As such, a normal good will have a positive income elasticity of demand coefficient but it will be less than one.
Detailed explanation-2: -Demand for normal goods increase as income rises. The income elasticity of demand formula measures the change in demand to a change in income.
Detailed explanation-3: -The demand for a normal good increases if income increases. The demand for an inferior good decreases if income increases.
Detailed explanation-4: -Normal goods are a type of goods whose demand shows a direct relationship with a consumer’s income. It means that the demand for normal goods increases with an increase in the consumer’s income or expansion of the economy (which generally will increase the income of the population).