If for good Z income elasticity is less than 1 but greater than zero, then demand for good Z is income __________, and good Z is a(n) __________ good.
A)inelastic; normal
B)inelastic; inferior
C)elastic; normal
D)elastic; an inferior
E)unit elastic; normal

Question

Quizplus · Accepted Answer

When the income elasticity of demand is less than 1 but greater than zero, it indicates that demand increases with income, but at a slower rate than the increase in income, classifying the good as a normal good with inelastic demand with respect to income.

If for Good Z Income Elasticity Is Less Than 1