What do we call goods that are always consumed in the same proportion? Explain
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Explanation: A normal good is a good that experiences an increase in its demand due to a rise in consumers' income. In other words, if there's an increase in wages, demand for normal goods increases while conversely, wage declines or layoffs lead to a reduction in demand.
A normal good, also called a necessary good, doesn't refer to the quality of the good but rather, the level of demand for the good in relation to wage increases or declines.
A normal good has an elastic relationship between income and demand for the good. In other words, changes in demand and income are positively correlated or move in the same direction. Income elasticity of demand measures the magnitude with which the quantity demanded for a good changes in reaction to a change in income. It is used to understand changes in consumption patterns that result from changes in purchasing power.
Income elasticity of demand can be calculated by taking the percentage of change in the quantity demanded for the good and dividing it by the percentage change in income. A normal good has an income elasticity of demand that is positive, but less than one.
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