If a Good Has an Income Elasticity of −0

question 136

Multiple Choice

If a good has an income elasticity of −0.85, then it:

• A) is a normal good, and a necessity.
• B) is an inferior good.
• C) is a necessity, but may be normal or inferior.
• D) is a luxury.

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Definitions:

Investigation

The systematic inquiry or examination into something to discover facts, establish evidence, or reach new conclusions.

Factorial Designs

Experimental setups that allow researchers to examine the effects of two or more independent variables simultaneously on a dependent variable.

Independent Variables

The variables manipulated or changed in an experiment to explore their effects on the dependent variable.

Interactive Effects

The combined effects of two or more independent variables on a dependent variable that are not simply additive.