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Q: Due to an increase in her rent, Isa needs to cut back her spending on other items. Which of the following types of goods will Isa consume less of? A. substitutes B. normal goods C.
inferior goods D. complements
A: Due to an increase in her rent, Isa needs to cut back her spending on other items. She will consume less: B. normal goods. Normal goods are the products or services for which demand grows when consumers' purchasing power rises, and shrinks when purchasing power falls, with the price remaining stable. For example, quality alkaline batteries are a normal good: people prefer them over inferior
batteries when their income allows them to spend additional money on them, but their price is set. The term "normal" is used to suggest that these goods are what all consumers would "normally" purchase if their income was enough. Read more: Normal Goods in Economics | eHow.com
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Asked 12/19/2012 12:47:15 PM
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