If the price of paperback books increases and consumer expenditures on paperback books also increase, which of the following is necessarily true? a. Paperback books are normal goods. b. Paperback books are inferior goods. c. The demand for paperback books

The correct answer is (a) Paperback books are normal goods. A normal good is one where demand increases as consumer income increases. In this case, if the price of paperback books increases but consumer expenditures on paperback books also increase, it implies that consumers are not reducing their consumption of paperback books despite the higher price. This suggests that paperback books are not inferior goods (consumers would typically reduce their consumption of inferior goods when the price increases). Moreover, the fact that consumers are still purchasing more of the books even at the higher price indicates that they consider the books to be an essential or desirable item (i.e. they are not reducing their demand for the books). This means that paperback books are most likely normal goods. Therefore, option (a) is correct. Options (c), (d) and (e) pertain to demand elasticity, which is not determined solely by changes in price and consumer expenditures. Hence, they are not necessarily true in this scenario.