PRC-3 · Chapter 11 · Question 4 of 57
An economic analyst calculates the income elasticity of demand for a specific brand of instant noodles to be -1.5. This negative value mathematically classifies the instant noodles as a(n):
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Inferior good
Explanation
A negative income elasticity of demand indicates that as consumers' incomes rise, they buy less of the good, which is the defining characteristic of an inferior good.
More Elasticity of Demand and Supply MCQs
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