A Positive Income Elasticity of Demand for a Good Means

question 264

Multiple Choice

A positive income elasticity of demand for a good means:

• A)​it is a substitute.
• B)​it is a complement.
• C)​it is a normal good.
• D)​it is an inferior good.

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Definitions:

Low-income Workers

Individuals employed in jobs that pay wages below a certain threshold, often struggling to meet basic living expenses.

Moral Hazard

A situation in which one party in a transaction has the opportunity to assume additional risks that negatively affect the other party, often arising in insurance and finance.

Underconsume

When consumers buy less of a good or service than is economically efficient, often leading to potential welfare losses.

Private Health Insurance

Health insurance coverage provided by private entities as opposed to government programs, often through employment or individual purchase.