Asked by
Jenea Ector
on Oct 26, 2024Verified
If the percentage change in the quantity demanded of a good is greater than the percentage change in income and in the same direction,then this good will have an income elasticity _____1,and it is a(n) _____ good.
A) greater than;normal
B) less than;normal
C) equal to;normal
D) greater than;inferior
Income Elasticity
A measure of how the demand for a good or service changes relative to a change in consumers' income.
Normal Good
A good for which demand increases as the income of consumers increases and decreases as the income of consumers decreases.
Inferior
A term used in economics to describe goods whose demand decreases as the income of the consumer increases, contrasted with normal goods.
- Understand the principles of income elasticity of demand and cross-price elasticity of demand, and their connection to goods classified as normal, inferior, substitutes, or complements.
Verified Answer
SS
Learning Objectives
- Understand the principles of income elasticity of demand and cross-price elasticity of demand, and their connection to goods classified as normal, inferior, substitutes, or complements.