If a Good Is Inferior in an Economic Sense

question 172

Multiple Choice

If a good is inferior in an economic sense:

• A) it is demand price elastic.
• B) it is demand price inelastic.
• C) the income elasticity of demand is negative.
• D) it is a low-quality good.
• E) it is not the highest quality good in its class.

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Definitions:

Earnings Ratio

Typically refers to the price-to-earnings (P/E) ratio, which measures a company's current share price relative to its per-share earnings.

Annual Earnings

The total amount of money earned by an individual or entity in one year, often before taxes.

Earnings Ratio

Earnings ratio typically refers to financial metrics that compare various aspects of a company's earnings to other measures, such as its share price in the price-to-earnings ratio.