Suppose that a 20% increase in income generates a 15% increase in the quantity of X demanded. The income elasticity of demand for good X isMultiple Choicenegative and therefore X is an inferior good.positive and therefore X is a normal good.negative and therefore X is an complementary good.positive and therefore X is a substitute good.

Assume that a 4 percent increase in income in the economy produces an 8 percent increase in the quantity demanded of good X. The coefficient of income elasticity of demand is:Multiple Choicenegative and therefore X is an inferior good.negative and therefore X is a normal good.positive and therefore X is an inferior good.positive and therefore X is a normal good.

A negative income elasticity of demand indicates that the productMultiple Choiceis an inferior good.is a normal good.is a complementary good.is a substitute good.

Assume that a 3% increase in income across the economy produces a 1% decrease in the quantity of fast food demanded. The income elasticity of demand for fast food is ____________, and therefore fast food is _______________Multiple Choicenegative; an inferior good.negative; a normal good.positive; an inferior good.positive; a normal good.

If the income elasticity coefficient is negative, it means thatmultiple choice 2the good is normal so that if price falls, the quantity demanded of the good will rise.the good is inferior so that if price falls, the quantity demanded of the good will rise.the good is inferior so that if income falls, the quantity demanded of the good will rise.the good is inferior so that if income falls, the quantity demanded of the good will fall.

Select the type of good where the negative income effect is strong to outweigh the substitution effect and where the law of demand fails to hold.   Inferior goods   Complements   Normal goods.   Giffen goods