Multiple Choice
If cheese in a can is an inferior good, what happens to its market when consumer income increases?
785
views
9
rank
3. The Market Forces of Supply and Demand
Shifts in the Demand Curve
Multiple Choice
Which of the following would shift the demand curve for gasoline to the right?
A
An increase in the price of cars
B
A decrease in the price of gasoline
C
A decrease in the population size
D
An increase in consumer income, assuming gasoline is a normal good
Verified step by step guidance1
Understand that a demand curve shifts when a non-price determinant of demand changes. Price changes of the good itself cause movements along the demand curve, not shifts.
Identify factors that can shift the demand curve for gasoline, such as changes in consumer income, prices of related goods, population size, consumer preferences, and expectations.
Analyze each option: An increase in the price of cars (a related good) could affect demand for gasoline depending on whether cars are substitutes or complements; a decrease in the price of gasoline causes movement along the demand curve, not a shift; a decrease in population size reduces the number of consumers, shifting demand left.
Recognize that an increase in consumer income, assuming gasoline is a normal good, increases consumers' purchasing power, leading to a higher quantity demanded at every price, thus shifting the demand curve to the right.
Conclude that among the options, only an increase in consumer income (for a normal good) shifts the demand curve for gasoline to the right.
Related Videos
Related Practice
