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Economics
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 A positive income elasticity of demand coefficient indicates that

 

a.   a product is an inferior good

b.   two products are substitute goods

c.   two products are complementary goods

d.   a product is a normal good

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Garima Menon
Garima MenonLv7
31 Jan 2021
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Related questions

  1. If goods A and B have a cross elasticity of demand that is positive, this is evidence that goods A and B are __________ goods.
    a.
    substitute
    b.
    normal
    c.
    complementary
    d.
    inferior

The distinction between substitutes and complements is

A. substitute goods are used together while complementary goods are used for the same purposes.

B. when income​ increases, demand for a complementary good decrease while demand for a substitute good increases.

C. substitute goods are used for the same purposes while complementary goods are used together.

D. when income​ increases, demand for a substitute good increases while demand for a complementary good falls


(a) Giving examples, explain the difference between:
(i) an inferior good and a normal good;
(ii) substitute and complementary goods.
(b) Carefully explain what happens to the demand for a Giffen good as its price rises.

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