If the income elasticity of a good is negative,then
A) the good must be a Giffen good.
B) the substitution and income effects must be moving in the same direction.
C) the Engel curve for this good must be downward sloping.
D) the law of demand must be satisfied for this good.

Question

Quizplus · Accepted Answer

A negative income elasticity indicates that as income increases, the demand for the good decreases, which is characteristic of inferior goods, leading to a downward-sloping Engel curve.

If the Income Elasticity of a Good Is Negative,then