If the income elasticity for Ramen Noodles is -3.0,we may conclude that Ramen Noodles are _________.
A)a normal good
B)an inferior good
C)both a normal good and an inferior good
D)neither a normal good nor an inferior good

Question

Quizplus · Accepted Answer

A negative income elasticity indicates that as income increases, the demand for Ramen Noodles decreases. This is characteristic of an inferior good, meaning that it is seen as low-quality and purchased mainly by people with low incomes or in times of economic hardship.

If the Income Elasticity for Ramen Noodles Is -3