Suppose the consumer's income elasticity for good $x$ is -0.10 when monthly income is $1,000, and the consumer's income elasticity for good $x$ is 0.10 when monthly income is $2,000. From this information we can infer that
A) good $x$ is an inferior good for low levels of income and a superior good for high levels of income.
B) good $x$ is a normal good for low levels of income and an inferior good for high levels of income.
C) good $x$ in an inferior good for low levels of income and a normal good for high levels of income.
D) good $x$ is a Giffen good.

Question

Quizplus · Accepted Answer

When the income elasticity is negative (-0.10), the good is considered inferior at low income levels. When the income elasticity is positive (0.10), the good is considered normal at higher income levels.

Suppose the Consumer's Income Elasticity for Good xxx Is -010 When Monthly Income Is $1,000, and the Consumer's Income

Suppose the Consumer's Income Elasticity for Good $x$ Is -010 When Monthly Income Is $1,000, and the Consumer's Income