Practice Quiz

AP Microeconomics

Category - Microeconomics

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Which of the following would cause the demand curve for a normal good like a watch, to shift to the left?
  1. An increase in the price of the watch
  2. An increase in the price of the metal used to make the watch
  3. An increase in the consumer income
  4. A decrease in consumer income
Explanation
Answer - D - A decrease in consumer income would cause the demand curve for a normal good like a watch to shift to the left.

Key Takeaway: In general, there are two different types of goods: normal and inferior. A normal good is defined as a good for which there is an increase in demand as consumer income rises. The opposite is true for an inferior good: as consumer incomes rise, demand decreases.
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