Texas A&M University (TAMU) AGEC 105 Introduction to Agricultural Economics Exam 1 Practice

This question tests how demand changes as income changes. Gasoline is a normal good, meaning its quantity demanded tends to rise when income rises. People can afford more trips and longer travel with higher income, so they buy more gasoline overall.

An inferior good would see demand fall as income increases, which isn’t typical for gasoline. The terms complement or substitute describe how gasoline relates to other goods (for example, cars as a complement to gasoline) rather than how demand responds to income, so they don’t best describe gasoline in this context.