Question

In supply and demand theory, an increase in consumer income for a normal good will:

1. Shift the demand curve in and to the left, lowering the equilibrium price but raising the equilibrium quantity.

2. Shift the supply curve out and to the right, lowering the equilibrium price but raising the equilibrium quantity.

3. Shift the demand curve out and to the right, lowering the equilibrium price but raising the equilibrium quantity.

4. Shift the supply curve in and to the left, lowering the equilibrium price and quantity.

5. Shift the demand curve out and to the right, raising the equilibrium price and quantity.