Questions: Question 7 (Mandatory) ( 0.6 points) Suppose televisions are a normal good and buyers of televisions experience a decrease in income. As a result, consumer surplus in the television market a) decreases. b) is unchanged. c) may increase, decrease, or remain unchanged. d) increases.

The answer is the first one (a): decreases.

Explanation for each option:

a) Decreases: This is the correct answer. Televisions are a normal good, which means that as income decreases, the demand for televisions will also decrease. A decrease in demand typically leads to a lower equilibrium price and quantity in the market. As a result, the consumer surplus, which is the difference between what consumers are willing to pay and what they actually pay, will decrease because fewer consumers are buying televisions and those who do are paying less.

b) Is unchanged: This is incorrect. A decrease in income for buyers of a normal good will affect the demand for that good, leading to changes in the market equilibrium and consumer surplus.

c) May increase, decrease, or remain unchanged: This is incorrect. While it is theoretically possible for various factors to influence consumer surplus in different ways, the specific context given (televisions as a normal good and a decrease in income) leads to a predictable decrease in consumer surplus.

d) Increases: This is incorrect. A decrease in income for buyers of a normal good will lead to a decrease in demand, which in turn decreases consumer surplus.

Summary: When buyers of televisions, which are a normal good, experience a decrease in income, the consumer surplus in the television market decreases.