If the income elasticity for a particular good is 1.8, we would expect to see more of that good:
A) consumed in low-income communities.
B) consumed by people on higher incomes.
C) on supermarket shelves.
D) consumed equally by all citizens.

Question

Quizplus · Accepted Answer

A positive income elasticity coefficient greater than 1 indicates that the good is a luxury good. Therefore, people with higher incomes will consume more of the good as their incomes increase.

If the Income Elasticity for a Particular Good Is 1