You notice that whenever incomes rise by 5 percent, people buy 3 percent more of Good A. This suggests that Good A has a negative income elasticity of demand.

Question

Quizplus · Accepted Answer

The positive relationship between income rise and the increase in quantity demanded for Good A indicates that Good A has a positive income elasticity of demand, meaning it is a normal good.

You Notice That Whenever Incomes Rise by 5 Percent, People