Suppose Good X Has a Positive Income Elasticity of Demand

question 572

Multiple Choice

Suppose good X has a positive income elasticity of demand. This implies that good X could be i) a normal good.
Ii) a necessity.
Iii) an inferior good.
Iv) a luxury.

• A) i) only
• B) i) and ii) only
• C) i), ii), and iv) only
• D) iii) only

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Definitions:

Interest

The cost of borrowing money, typically expressed as an annual percentage of the principal, or the profit earned on savings and investments.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee able to transfer it to another holder.

Good Contract

An agreement that is valid under the law and contains all the essential elements making it enforceable and binding.

Definition

A statement that explains the meaning of a term or phrase, clarifying its notion and context within a particular field.