Assume That a Four Per Cent Increase in Income Results

Multiple Choice

Assume that a four per cent increase in income results in a two per cent increase in the quantity demanded of a good. The income elasticity of demand for the good is:

A) negative and therefore the good is an inferior good
B) negative and therefore the good is a normal good
C) positive and therefore the good is an inferior good
D) positive and therefore the good is a normal good