If the demand for a good increases when people's incomes increase,
A) the good is an inferior good.
B) the law of demand is violated.
C) the good's demand curve must be slope upward.
D) the good is a normal good.
E) the good is a substitute good for an inferior good.

Question

Quizplus · Accepted Answer

When the demand for a good increases when people's incomes increase, it indicates that the good is a normal good. This is because as people's incomes increase, they have more purchasing power and are willing to buy more of the normal goods they already consume. An inferior good, on the other hand, is a good for which demand decreases when people's incomes increase. The law of demand states that as the price of a good increases, the quantity demanded decreases, which is not relevant to this scenario. The demand curve for a good can slope upward or downward, depending on various factors such as availability of substitutes and complementary goods.

If the Demand for a Good Increases When People's Incomes