Assume That a 3 Percent Increase in Income Across the Economy

Multiple Choice

Assume that a 3 percent increase in income across the economy produces a 1 percent decline in the quantity demanded of good X. The coefficient of income elasticity of demand for good X is

A) negative, and therefore X is an inferior good.
B) negative, and therefore X is a normal good.
C) positive, and therefore X is an inferior good.
D) positive and therefore X is a normal good.