Question

Economics Semester Exam
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Question
If income levels of consumers within a given economy increase, what would happen to the demand curve for cell phones, a normal good, and the demand curve for instant noodles, an inferior good?(1 point)
Responses

The demand curve for cell phones would shift to the right, and the demand curve for instant noodles would remain unchanged.
The demand curve for cell phones would shift to the right, and the demand curve for instant noodles would remain unchanged.

The demand curves would both shift to the right.
The demand curves would both shift to the right.

The demand curve for cell phones would shift to the left, and the demand curve for instant noodles would shift to the right.
The demand curve for cell phones would shift to the left, and the demand curve for instant noodles would shift to the right.

The demand curve for cell phones would shift to the right, and the demand curve for instant noodles would shift to the left.

Answer 1

If income levels of consumers within a given economy increase, we can anticipate the following effects on the demand curves:

1. **Cell Phones (Normal Good)**: As cell phones are considered a normal good, an increase in consumer income leads to an increase in the demand for cell phones. This means the demand curve for cell phones would shift to the right.

2. **Instant Noodles (Inferior Good)**: Instant noodles are classified as an inferior good, which means that as income rises, the demand for them usually decreases, as consumers tend to purchase more expensive substitutes. Therefore, the demand curve for instant noodles would shift to the left.

Given this analysis, the correct response would be:

**The demand curve for cell phones would shift to the right, and the demand curve for instant noodles would shift to the left.**