Beef has a positive income elasticity in Algeria. What would happen in the Alger

Question

Beef has a positive income elasticity in Algeria. What would happen in the Algerian beef market if an economic recovery increased incomes?

Demand would shift out (or shift up/right), price would increase, and quantity would increase

Demand would shift out (or shift up/right), price would decrease, and quantity would increase

Demand would shift in (or shift down/left), price would decrease, and quantity would decrease

Demand would shift in (or shift down/left), price would increase, and quantity would decrease

Demand would shift out (or shift up/right), price would increase, and quantity would increase

Demand would shift out (or shift up/right), price would decrease, and quantity would increase

Demand would shift in (or shift down/left), price would decrease, and quantity would decrease

Demand would shift in (or shift down/left), price would increase, and quantity would decrease

Explanation / Answer

After a rise in incomes, the people of Algeria will demand more beef at every given price, implying that demand curve will shift rightwards, and the new equilibrium will take place at a higher price and a higher quantity. So the correct answer is (a).

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