Suppose the Consumer's Income Elasticity for Good $x$ Is -010 When Monthly Income Is $1,000, and the Consumer's Income

question 3

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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Definitions:

Cones

Cells in the eye's retina known as photoreceptors work optimally in well-lit conditions and allow for the recognition of different colors.

Color Receptors

Specialized cells in the retina of the eye responsible for detecting color through the absorption of light at varying wavelengths.

Wavelengths

The length separating consecutive peaks of a wave, particularly in sound or electromagnetic waves.

Dichromatic Vision

A form of color vision deficiency where a person can perceive only two of the three basic colors.