Asked by Haily Cole-Randall on Jul 21, 2024
Verified
A positive income elasticity value indicates that the good is a normal good.
Income Elasticity
A measure of how the quantity demanded of a good or service changes in response to changes in consumer income.
Normal Good
A good whose demand increases when consumer income rises.
- Identify the distinction between normal and inferior goods through the lens of income elasticity values.
Verified Answer
KV
Khushbu VhoraJul 27, 2024
Final Answer :
True
Explanation :
A positive income elasticity of demand means that as income increases, demand for the good also increases, which is characteristic of a normal good.
Learning Objectives
- Identify the distinction between normal and inferior goods through the lens of income elasticity values.