Asked by
Andressa Souza Costa Oliveira
on Oct 26, 2024
Verified
The income elasticity of demand of a normal good is always:
A) greater than 0.
B) less than 0.
C) equal to 0.
D) impossible to determine without more information about the type of good in question.
Income Elasticity
Measures how the quantity demanded of a good responds to a change in consumer income.
Normal Good
An item for which demand increases as the income of consumers increases, showing a direct relationship between income and demand.
- Gain insight into the notion of income elasticity of demand and its application in identifying goods as either normal or inferior.
- Evaluate the effect of changes in income levels on goods demand with reference to income elasticity.
Verified Answer
SS
Learning Objectives
- Gain insight into the notion of income elasticity of demand and its application in identifying goods as either normal or inferior.
- Evaluate the effect of changes in income levels on goods demand with reference to income elasticity.