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

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

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