Questions: Which of the following would shift the demand curve for gasoline to the right? (A) A decrease in the price of gasoline (B) An increase in consumer income, assuming gasoline is a normal good (C) An increase in the price of cars, a complement for gasoline (D) A decrease in the expected future price of gasoline

Which of the following would shift the demand curve for gasoline to the right?
(A) A decrease in the price of gasoline
(B) An increase in consumer income, assuming gasoline is a normal good
(C) An increase in the price of cars, a complement for gasoline
(D) A decrease in the expected future price of gasoline
Transcript text: Which of the following would shift the demand curve for gasoline to the right? (A) A decrease in the price of gasoline (B) An increase in consumer income, assuming gasoline is a normal good (C) An increase in the price of cars, a complement for gasoline (D) A decrease in the expected future price of gasoline
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Solution

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The answer is B: An increase in consumer income, assuming gasoline is a normal good.

Explanation for each option:

(A) A decrease in the price of gasoline: This would not shift the demand curve; instead, it would cause a movement along the demand curve. A decrease in price typically leads to an increase in the quantity demanded, but it does not shift the curve itself.

(B) An increase in consumer income, assuming gasoline is a normal good: This would shift the demand curve to the right. When consumer income increases, and gasoline is considered a normal good, people tend to buy more gasoline, increasing demand at every price level.

(C) An increase in the price of cars, a complement for gasoline: This would likely shift the demand curve for gasoline to the left. Cars and gasoline are complementary goods, meaning that if the price of cars increases, fewer people may buy cars, leading to a decrease in the demand for gasoline.

(D) A decrease in the expected future price of gasoline: This would likely cause the demand curve to shift to the left. If consumers expect prices to decrease in the future, they might delay their purchases, reducing current demand.

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