Question

What are normal goods? Give two examples.

Answer 1

Normal goods are those goods, the demand for which increases with the increase in income of the consumers. For example, a consumer increases his demand for milk, clothes, furniture, refrigerators and TV sets as his income increases. A consumer purchases 2 litres of milk daily when his monthly income is? 10,000 and purchases 3 litres of milk when his income rises to? 12,000 per month.