Question

The demand for most products varies directly with changes in consumer incomes. Such products are known as_________.

Answer 1

Answer:

The correct answer is letter "D": normal goods.

Explanation:

Normal Good is any good or service that sees an increase in demand as a result of an increase in income. Normal goods are defined as having an income elasticity coefficient of demand (percentage change in quantity demanded by a percentage change in price) lower than one (1) but is still a positive number.

Consumer staples such as food, drugs, drinks and basic household products are considered to be normal goods.

Answer 2

Answer:  

Normal goods

               

Explanation:

In simple words, normal goods refers to the goods which re necessary for the survival for the survival for re consumer and the consumer do not take its quality into consideration while making a purchase decision.

The demand for such goods have a positive relationship with the income of consumer, that is, when the income or wages of consumer increase the demand for  such goods also increases and vice versa.

The increase in demand for normal goods by consumer is sometimes also seen as an indicator of an economic growth. Clothes, vegetable and medicines are some of the many examples of normal goods.