Income elasticity of demand for good A is -0.22. Good A is income __________ and is a(n) __________ good.
A)unit elastic; normal
B)elastic; inferior
C)inelastic; normal
D)elastic; normal
E)inelastic; inferior

Question

Quizplus · Accepted Answer

The income elasticity of demand for good A is negative (-0.22), indicating that as income increases, demand for the good decreases. This makes it an inferior good. Additionally, since the absolute value of the elasticity is less than 1 (0.22), it is considered inelastic with respect to income.

Income Elasticity of Demand for Good a Is -0