Asked by Jessica Hegyi on Jun 09, 2024
Verified
What is a normal good?
A) A good whose demand increases when income decreases
B) A good whose demand decreases when income decreases
C) A good whose demand increases when price increases
D) Both B&C
Normal Good
A normal good is a type of good for which demand increases when income increases, and falls when income decreases, holding all other factors constant.
Income
Refers to the money received, especially on a regular basis, for work or through investments.
- Identify the differences between regular and substandard goods.
Verified Answer
JS
Jacob ShamayevJun 16, 2024
Final Answer :
B
Explanation :
A normal good is a good whose demand decreases when income decreases. This is because as income decreases, people have less money to spend on goods and may switch to cheaper alternatives, resulting in a decrease in demand for the good in question.
Learning Objectives
- Identify the differences between regular and substandard goods.