A recent report shows that sales at Target stores increased compared to the previous year. (Source: Business Wire, August 30, 2012) Incomes grew slightly between 2011 and 2012. Using that fact and the sales data given above means that Target definitely is selling goods and services that
A) are normal.
B) are inferior.
C) have an income elasticity of zero.
D) have an income elasticity of 1.

Question

Quizplus · Accepted Answer

When incomes grow and sales increase, it suggests that the goods are normal, as demand for normal goods increases with higher income.

A Recent Report Shows That Sales at Target Stores Increased