Which of the following shows that the good concerned is a normal good for the consumer?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Her demand for paneer rises when her income rises
A normal good is one whose demand rises when income rises. Only the paneer example links demand to income in that way.
Option (1) Her demand for paneer rises when her income rises — Correct. Demand moves in the same direction as income.
Option (2) Her demand for coarse cereals falls when her income rises — Incorrect. Demand falling as income rises marks an inferior good, like coarse cereals.
Option (3) Her demand for tea rises when the price of coffee rises — Incorrect. Tea and coffee are substitutes; this shows a link with another good’s price.
Option (4) Her demand for sugar falls when the price of tea rises — Incorrect. Tea and sugar are complements, used together; this too is about a related good’s price.
NCERT (2026-27): “2.4.3 Normal and Inferior Goods … The quantity of a good that the consumer demands can increase or decrease with the rise in income depending on the nature of the good. For most goods, the quantity that a consumer chooses, increases as the consumer’s income increases and decreases as the consumer’s income decreases. Such goods are called normal goods. Thus, a consumer’s demand for a normal good moves in the same direction as the income of the consumer. …” “… Examples of inferior goods include low quality food items like coarse cereals. …” |