The income elasticity of demand for shoes is estimated to be 1.50. We can conclude that shoes:
A) have a relatively steep demand curve.
B) have a relatively flat demand curve
C) are a normal good.
D) are an inferior good.

Question

Quizplus · Accepted Answer

The income elasticity of demand being greater than 1 (1.50 in this case) indicates that shoes are a normal good, as demand for them increases with an increase in income.

The Income Elasticity of Demand for Shoes Is Estimated to Be