Assume that automobiles are a normal good. An increase in income will
A) shift the marginal revenue product curve of auto workers to the left.
B) move a firm down the marginal revenue product curve of auto workers.
C) shift the marginal revenue product curve of auto workers to the right.
D) have no effect on the marginal revenue product curve of auto workers.

Question

Quizplus · Accepted Answer

Since automobiles are a normal good, an increase in income will lead to an increase in the demand for automobiles. This increased demand will, in turn, increase the value of the output produced by auto workers, shifting the marginal revenue product curve of auto workers to the right.

Assume That Automobiles Are a Normal Good