For a normal good, an increase in consumer income will lead to I. a movement down the demand curve
II) a rightward shift in the demand curve
III) a reduction in supply

Question

Quizplus · Accepted Answer

An increase in consumer income for a normal good will lead to an increase in demand, resulting in a rightward shift in the demand curve. This is because consumers' ability to purchase the good has increased, leading to increased demand at each price level. There is no relationship between consumer income and supply, so option III can be eliminated. Option I is incorrect because an increase in consumer income would result in an upward movement along the demand curve, not a downward movement.

For a Normal Good, an Increase in Consumer Income Will