by the same amount. In this example, not everyone would have higher or lower income and not everyone

would buy or not buy an additional car. Instead, a shift in a demand curve captures a pattern for the market as

a whole.

In the previous section, we argued that higher income causes greater demand at every price. This is true for

most goods and services. For some—luxury cars, vacations in Europe, and fine jewelry—the effect of a rise in

income can be especially pronounced. A product whose demand rises when income rises, and vice versa, is

called a normal good. A few exceptions to this pattern do exist. As incomes rise, many people will buy fewer

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3.2 • Shifts in Demand and Supply for Goods and Services 57

generic brand groceries and more name brand groceries. They are less likely to buy used cars and more likely

to buy new cars. They will be less likely to rent an apartment and more likely to own a home. A product whose
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