Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Identify the reason of rightward shift in demand curve of a normal good.

Options:

Increase in income of consumer

Increase in the price of the good

Decrease in the price of the good

No change in the price

Correct Answer:

Increase in income of consumer

Explanation:

The correct answer is option (1) : Increase in income of consumer

Given the prices of other goods and the preferences of a consumer, if the income increases, the demand for the good at each price changes, and hence, there is a shift in the demand curve. For normal goods, the demand curve shifts rightward and for inferior goods, the demand curve shifts leftward.