Which of the following factor makes the demand curve to shifts leftward for a normal goods? |
When the consumer's income increases. Consumer's preferences change in favour of a good. The price of goods decrease. When the consumer's income decreases. |
When the consumer's income decreases. |
The correct answer is Option (4) → When the consumer's income decreases. For normal goods, demand increases when income increases, and decreases when income decreases. So, a decrease in consumer's income causes the demand curve to shift leftward for a normal good. Option (1) → When the consumer's income increases. This would cause the demand curve to shift rightward, not leftward, for normal goods, since people can now afford to buy more. Option (2) → Consumer's preferences change in favour of a good. If preferences shift in favour of a good, demand increases, causing a rightward shift, not a leftward one. Option (3) → The price of goods decrease. A decrease in price causes movement along the demand curve, not a shift. Specifically, it results in expansion in quantity demanded, not a shift to the left. |