Goods Are ________ When the Income Elasticity of Demand Is

question 93

Multiple Choice

Goods are ________ when the income elasticity of demand is less than zero.

• A) substitutes
• B) complements
• C) inferior
• D) elastic
• E) normal

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Definitions:

Substitutes

Goods or services that can be used in place of each other, where an increase in the price of one leads to an increase in the demand for the other.

Demand Curve

A visual chart that illustrates the connection between the cost of an item and the amount consumers are willing to buy at those costs.

Demand Curve

A chart that illustrates how the quantity of a product that consumers are ready to buy varies with its price.

Decrease in Demand

Refers to a situation where consumers' desire to purchase goods or services at a given price level decreases, leading to a leftward shift in the demand curve.