Suppose a college increases the wages paid to its student employees.Which of the following is the most likely effect of the wage increases on the market for college logo sweat shirts in the bookstore?

Question

Quizplus · Accepted Answer

When the college increases the wages paid to its student employees, they have more income to spend. This increase in income is likely to increase the demand for normal goods, such as college logo sweatshirts. Therefore, the demand curve for these sweatshirts would shift to the right, indicating an increase in demand at every price level.

Suppose a College Increases the Wages Paid to Its Student