Suppose that you know a good is a normal good for a consumer.Which of the following can you then conclude to be true:
A)The own-price elasticity of demand is less than -1.
B)The income elasticity of demand is greater than 0.
C)The own-price elasticity of demand is greater than -1.
D)The income elasticity of demand is less than 0.
E)Both (a) and (b).
F)Both (a) and (d).
G)Both (b) and (c).
H)None of the above.

Question

Quizplus · Accepted Answer

For a good to be considered a normal good, the income elasticity of demand must be greater than 0. This means that as income increases, the demand for the good increases.

Suppose That You Know a Good Is a Normal Good