Final answer:
When Alanna receives a pay increase, her demand for normal goods is expected to increase, while her demand for inferior goods is expected to decrease.
Step-by-step explanation:
When Alanna receives a pay increase, we would expect her demand for normal goods to increase. This is because normal goods have a positive income elasticity of demand, meaning that as income rises, the quantity consumed of these goods also rises. For example, if Alanna's income increases, she may choose to buy a higher-quality brand of clothing or upgrade to a better car.
On the other hand, we would expect Alanna's demand for inferior goods to decrease. Inferior goods have a negative income elasticity of demand, so as income rises, the quantity consumed of these goods decreases. For instance, if Alanna's income increases, she may choose to stop buying generic store-brand products and instead opt for higher-quality alternatives.
Therefore, when Alanna receives a pay increase, we generally expect her to move down and to the right along her given demand curve for normal goods, indicating an increase in the quantity consumed of those goods.