The quantity demanded of good A rises as income rises. It follows that income elasticity of demand is __________than 0, and good A is a(n) __________ good.
A)greater; inferior
B)greater; normal
C)greater; substitute
D)greater; complementary
E)less; normal

Question

Quizplus · Accepted Answer

The income elasticity of demand measures how the quantity demanded of a good responds to a change in income. If the quantity demanded rises as income rises, the good is a normal good, and the income elasticity of demand is positive (greater than 0).

The Quantity Demanded of Good a Rises as Income Rises