For a good such as a large screen HD television set,the income elasticity would likely be
A) negative.
B) equal to zero.
C) positive and less than one.
D) positive and greater than one.
E) undefined because large screen, HD TVs are bought by many consumers.

Question

Quizplus · Accepted Answer

Large screen HD TVs are considered luxury goods, which means that as consumers' income increases, the demand for the good also increases. Therefore, the income elasticity of demand for large screen HD TVs is positive, and since they are luxury goods, the income elasticity is greater than one.

For a Good Such as a Large Screen HD Television