A normal good is a good that
A) is demanded by the average consumer.
B) is reliable and of good quality.
C) has a negative income elasticity.
D) has a positive income elasticity of less than 1.

Question

Quizplus · Accepted Answer

A normal good is one for which demand increases as income increases, which is characterized by a positive income elasticity of demand. This does not necessarily mean the elasticity has to be less than 1; it simply needs to be positive. Choices A, B, and C do not accurately define a normal good based on economic terms.

A Normal Good Is a Good That