When income increases, the demand curve for X shifts rightward and the demand curve for Y shifts leftward. These shifts mean that

Question

Quizplus · Accepted Answer

When income increases and the demand for a good increases, that good is considered a normal good (X in this case). Conversely, if the demand for a good decreases with an increase in income, that good is considered an inferior good (Y in this case).

When Income Increases, the Demand Curve for X Shifts Rightward