When the quantity demanded of a good increases as the income of the consumer increases (that is, the income effect is positive), such a good is known in microeconomics as which type of good?

Introduction / Context:
In consumer theory, goods are classified according to how their demand responds to changes in income. Understanding the categories of normal goods, inferior goods, superior goods, and Giffen goods is essential for analysing demand functions and Engel curves. This question asks you to identify the term used for a good whose demand increases when the consumer income increases, assuming other factors such as price remain constant.

Given Data / Assumptions:

• The quantity demanded of the good rises as consumer income rises.
• Other factors such as the price of the good and tastes are assumed to remain constant.
• The options include superior good, Giffen good, inferior good, normal good, and complementary good.
• We use standard microeconomic definitions of these terms.

Concept / Approach:
A normal good is defined as a good for which demand increases when income increases and decreases when income decreases, holding everything else constant. An inferior good shows the opposite pattern: as income rises, demand for that good falls because consumers switch to higher quality alternatives. Superior goods are sometimes used as a term for goods with high income elasticity (luxury goods), but the basic category for positive income effect is normal goods. A Giffen good is a special type of inferior good with a positive price effect, and complementary goods are defined by their relationship to other goods, not directly by income response.

Step-by-Step Solution:
Step 1: Focus on the key condition: demand increases when income increases, meaning income elasticity of demand is positive.Step 2: Recall that a normal good is any good with a positive income effect, so that higher income leads to higher quantity demanded.Step 3: Inferior goods are those for which demand falls when income rises, so they do not fit the described behaviour.Step 4: Giffen goods are a rare category of inferior goods where the demand curve slopes upwards with respect to price; they still do not show a simple positive income effect.Step 5: Superior goods or luxury goods are actually a subset of normal goods with income elasticity greater than one, but the general term for any good with positive income effect is normal good.Step 6: Complementary goods are defined in relation to another good (for example, tea and sugar) based on price effects, not purely by income changes.Step 7: Therefore, the correct answer is normal good.

Verification / Alternative check:
In basic microeconomics diagrams, an Engel curve for a normal good slopes upward as income rises, indicating higher quantities purchased at higher income levels. This matches the behaviour described in the question. For inferior goods, the Engel curve eventually bends backward, showing lower quantities purchased at higher income levels. Textbooks explicitly define normal goods as goods whose demand moves in the same direction as income. This verification confirms that normal good is the correct term for the situation presented.

Why Other Options Are Wrong:
Superior good: While superior or luxury goods also have demand rising with income, the more general and standard term for any good with positive income elasticity is normal good. Exams usually expect the term normal good for this basic definition.

Giffen good: These are a special type of inferior good where higher prices may lead to higher quantity demanded, and they are not defined primarily by income changes.

Inferior good: For these goods, demand falls when income rises, which is the opposite of what is described.

Complementary good: This term refers to how demand for one good is related to the price of another good and does not directly describe income effects.

Common Pitfalls:
Students may confuse superior goods with normal goods and think that the term superior good is always used when demand rises with income. It is helpful to remember that superior goods are a subset of normal goods with a very strong positive income relationship, while normal goods is the standard, broader category. Reading questions carefully and noting whether they ask for the general term or a special case helps avoid mistakes.

Final Answer:
A good whose demand increases with an increase in income is called a normal good.