The income elasticity of demand for a product is high. This means that
A、Sales will fall only slightly when incomes of households fall
B、Sales will rise sharply when incomes of households rise
C、The good is an inferior good
A、Sales will fall only slightly when incomes of households fall
B、Sales will rise sharply when incomes of households rise
C、The good is an inferior good
【参考答案及解析】
Rationale: The income elasticity of demand measures the responsiveness of demand to changes in consumers' incomes An 'inferior' good has a negative income elasticity: as incomes fall, more is bought
Rationale: The income elasticity of demand measures the responsiveness of demand to changes in consumers' incomes An 'inferior' good has a negative income elasticity: as incomes fall, more is bought