If the Income Elasticity of Demand for a Good Is

question 30

Multiple Choice

If the income elasticity of demand for a good is greater than one, it implies that:

• A) as consumers' incomes increase, the quantity demanded of the good falls.
• B) sales of the good are highly sensitive to changes in consumers' income.
• C) the quantity demanded of the good increases during a recession.
• D) an increase in consumers' income will lead to a proportionate increase in sales of the good.
• E) sales of the good are highly sensitive to changes in the prices of other goods.