Suppose That the Income Elasticity of Demand for Good X

question 259

Multiple Choice

Suppose that the income elasticity of demand for good X is positive but less than 1. Other things being equal, which of the following statements is INCORRECT?

• A) Good X is a normal good.
• B) The quantity demanded of good X decreases as a consumer's income declines.
• C) A consumer buys more X as income rises, but the share of income spent on good X falls.
• D) A consumer buys more X as income rises and the share of income spent on good X also rises.

---

Definitions:

Shelter Principle

A legal rule in negotiable instruments law that allows a person who obtains a negotiable instrument under certain conditions to acquire greater rights than the transferor had.

Holder-In-Due-Course Status

is a legal status that protects a purchaser of debt when they acquire it for value, in good faith, and without notice of certain adverse claims or potential defenses.

Recover

The process of regaining possession or control of something lost or stolen, or obtaining compensation for a loss.

Holder In Due Course

A party who has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defenses and claims.