1,If the percentage change in quantity demanded of a good is less than the percentage change...

1,If the percentage change in quantity demanded of a good is less than the percentage change in buyer's income, then the good is said to be

income unit elastic.

income elastic.

price elastic.

price inelastic.

income inelastic

2. Income elasticity of demand for good A is -0.22. Good A is income __________ and is a(n) __________ good.

inelastic; inferior

unit elastic; normal

elastic; normal

elastic; inferior

inelastic; normal

Expert Solution

1. If the percentage change in quantity demanded of a good is less than the percentage change in buyer's income, then the good is said to be “income inelastic”

Income inelastic means that demand changes less than the income of the buyer

2. Income elasticity of demand for good A is -0.22. Good A is income “Inelastic” and is a(n) “inferior” good.

When elasticity is less than 1, then demand for that good is inelastic. If good A elasticity is -0.22, then it is inferior good because demand for inferior good fall with rise or change in income

Rahul Sunny answered 2 years ago

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