Answer to Question #233935 in Microeconomics for Mahlodi

Question

When an individual's income rises, ceteris paribus, his/ her demand for a loaf of bread, a normal good

A rises
B falls
C remain unchanged
D becomes more positive

Answer 1

Option 'a' Rises.

If the quantity demanded of any good increases with the increase in consumer's income, these types of goods are known as normal goods. The income elasticity of these goods is positive because these goods have a direct relationship with income. Their is a direct relationship between the demand of a normal good and the income of a consumer which means the demand for a normal good rise with the rise in income and the demand for the normal goods falls with the fall in income. So, the rise in the income of an individual would result in the rise in the demand for a loaf of bread which is a normal good.