Asked by
Jayden Watson
on Oct 26, 2024
Verified
If your purchases of shoes decrease from 11 pairs per year to 9 pairs per year when your income increases from $19,000 to $21,000 a year,other things equal,for you,shoes are considered a(n) _____ good.
A) normal
B) inferior
C) complementary
D) substitute
Income Elasticity
A measure of how much the demand for a good will change in response to a change in consumers' income.
Inferior Good
An inferior good is a type of good whose demand decreases when consumer income rises, in contrast to normal goods, whose demand increases with rising incomes.
Shoes
Footwear items designed to protect and comfort the human foot while offering various styles and functions.
- Understand the principle of income elasticity of demand and its utilization in distinguishing between normal and inferior goods.
- Utilize understanding of elasticity to forecast variations in demand or consumption in response to price fluctuations of related commodities or income changes.
- Analyze the impact of variations in income on consumer demand through the lens of income elasticity.
Verified Answer
LT
Learning Objectives
- Understand the principle of income elasticity of demand and its utilization in distinguishing between normal and inferior goods.
- Utilize understanding of elasticity to forecast variations in demand or consumption in response to price fluctuations of related commodities or income changes.
- Analyze the impact of variations in income on consumer demand through the lens of income elasticity.