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JAMB Economics 2012 Question 8

Question 8

Theory of Demand

A rise in income will, ceteris paribus, bring about

  1. A.a movement along the demand curve
  2. B.a leftward shift of the demand curve
  3. C.a rightward shift of the demand curve
  4. D.no effect on the demand curve.
Show the answer and explanation

Answer: C (a rightward shift of the demand curve)

Explanation

With more income, people buy more of a normal good at every price, so the demand curve shifts to the right.