Which of the following statements about normal goods are correct?
(A) For a normal good, a fall in income shifts the demand curve rightward.
(B) The demand for a normal good moves in the same direction as the consumer’s income.
(C) A normal good is one whose demand rises when the price of a related good rises.
(D) For most goods, the quantity a consumer chooses rises as her income rises.
(E) For a normal good, a rise in income shifts the demand curve rightward.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (B), (D) and (E) only
For a normal good, demand moves with income: up when income rises, down when it falls.
(A) For a normal good, a fall in income shifts the demand curve rightward. — Incorrect. A fall in income cuts demand at every price, so the curve shifts leftward.
(B) The demand for a normal good moves in the same direction as the consumer’s income. — Correct. This is what makes a good normal.
(C) A normal good is one whose demand rises when the price of a related good rises. — Incorrect. Demand rising with another good’s price describes a substitute; normal goods are about income.
(D) For most goods, the quantity a consumer chooses rises as her income rises. — Correct. Most goods are normal goods.
(E) For a normal good, a rise in income shifts the demand curve rightward. — Correct. Higher income raises demand at every price.
NCERT (2026-27): “2.4.3 Normal and Inferior Goods … 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. …” “2.4.5 Shifts in the Demand Curve … 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. …” “2.4.4 Substitutes and Complements … The demand for a good usually moves in the direction of the price of its substitutes.” |