Introduction to Economics 1 Deneme Sınavı Sorusu #1152058
Assume that, for a normal good, the market is in equilibrium. If there is an increase in individuals’ income, what would be the new equilibrium price and quantity in the market?
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the equilibrium price increases and the equilibrium quantity decreases, |
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the equilibrium price decreases and the equilibrium quantity increases, |
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the equilibrium price does not change and the equilibrium quantity decreases, |
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the equilibrium price and the equilibrium quantity both increases, |
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the equilibrium price decreases and the equilibrium quantity increases. |
CHANGES IN MARKET EQUILIBRIUM-Changes in demand
Consider the effects of an increase in the income of the consumers on the demand for vacations abroad. Vacationing abroad is a “normal good”: When income increases, ceteris paribus, there will be an increase in their demand and the demand curve for vacations abroad will shift to the right. So the change in demand causes both the equilibrium price and the equilibrium quantity to increase. The new equilibrium price and equilibrium quantity will be P1 and Q1, respectively.
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