Question

Good X is a normal good if an increase in income leads to

a. an increase in the demand for good X.

b. a decrease in the supply for good X.

c. an increase in the supply for good X.

d. a decrease in the demand for good X.

Answer 1

Solution:

The correct answer is a. an increase in the demand for good X.

 

Normal goods are a type of goods whose demand shows a direct relationship with a consumer's income

a normal good is a type of a good which experiences an increase in demand due to an increase in consumer’s income.