IB Economics Higher Level (HL) Practice Exam 2025 - Free IB Economics HL Practice Questions and Study Guide

Question: 1 / 400

Which of the following is NOT a characteristic of normal goods?

Demand increases with income

Demand decreases with income

Normal goods are defined as goods for which demand increases as consumer incomes rise. This is because consumers tend to purchase more of these goods when they have more income available. Therefore, any characteristic that suggests demand would decrease as income increases does not align with the definition of normal goods.

The first characteristic indicates that demand increases with income, which is true for normal goods. The third characteristic, that they are generally considered desirable, also aligns with normal goods because higher-income consumers typically opt for these goods over inferior options. Lastly, a positive income elasticity of demand reflects the relationship where an increase in income leads to an increase in the quantity demanded of normal goods, further supporting their classification.

Thus, the assertion that demand decreases with income is inconsistent with the fundamental understanding of normal goods.

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Generally considered desirable

Positive income elasticity

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