Economists distinguish between normal and inferior goods using _____
A)the price elasticity of demand.
B)the price elasticity of supply.
C)the income elasticity of demand.
D)the cross-price elasticity of demand.
E)tax incidence.

Question

Quizplus · Accepted Answer

The income elasticity of demand is used to distinguish between normal and inferior goods. Normal goods have a positive income elasticity of demand, which means as income increases, demand for the good also increases. Inferior goods have a negative income elasticity of demand, which means as income increases, demand for the good decreases.

Economists Distinguish Between Normal and Inferior Goods Using _____