When national income falls,sales of vacation packages also fall,even at constant prices.This fact suggests that the ________ elasticity of demand for vacation packages is ________.
A)income; positive
B)income; negative
C)price; positive
D)price; negative
E)cross; positive

Question

Quizplus · Accepted Answer

The fact that sales of vacation packages fall when national income falls suggests that these two are negatively related. This means that as income falls, the demand for vacation packages also falls, indicating that the income elasticity of demand for vacation packages is negative.

When National Income Falls,sales of Vacation Packages Also Fall,even at Constant