Solved

Suppose the Consumer's Income Elasticity for Good xx Is -010 When Monthly Income Is $1,000, and the Consumer's Income

Question 81

Multiple Choice

Suppose the consumer's income elasticity for good xx is -0.10 when monthly income is $1,000, and the consumer's income elasticity for good xx is 0.10 when monthly income is $2,000. From this information we can infer that


A) good xx is an inferior good for low levels of income and a superior good for high levels of income.
B) good xx is a normal good for low levels of income and an inferior good for high levels of income.
C) good xx in an inferior good for low levels of income and a normal good for high levels of income.
D) good xx is a Giffen good.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions