If your income goes up by 2% and,in response,the quantity demanded of good x falls by 3%,the good x can be considered
A)An inferior good
B)A normal good
C)A public good
D)A private good

Question

​If your income goes up by 2% and,in response,the quantity demanded of good x falls by 3%,the good x can be considered
A)​An inferior good
B)A normal good
C)A public good
D)​A private good

Quizplus · Accepted Answer

​Inferior goods are those for which the quantity demanded decreases as income increases, while normal goods are those for which the quantity demanded increases as income increases. Since the income elasticity of demand is negative (-1.5), good x can be considered an inferior good. When income goes up by 2%, the quantity demanded of good x falls by 3%, which implies that the good is sensitive to changes in income levels.

​If Your Income Goes Up by 2% And,in Response,the Quantity

If Your Income Goes Up by 2% And,in Response,the Quantity