If the income elasticity for canned food is 0.8, then canned food is an inferior good.

Name: If the income elasticity for canned food is 0.8, then canned food is an inferior good.
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Question

Quizplus · Accepted Answer

A positive income elasticity of demand indicates that a good is a normal good, while a negative income elasticity indicates that a good is an inferior good. Since the income elasticity for canned food is 0.8, which is positive, it is a normal good, not an inferior good.

If the Income Elasticity for Canned Food Is 0