If a 10 percent increase in income induced a group of consumers to reduce their yearly purchases of eggs by 5 percent, for these consumers,

A) the income elasticity of eggs equals approximately 1.05.
B) the income elasticity of eggs is 0.5.
C) eggs are a luxury good.
D) eggs are an inferior good.

Question

Kimani Black · Accepted Answer

Final Answer : D, Explanation :  The negative income elasticity indicates that as income increases, the demand for eggs decreases, classifying eggs as an inferior good for these consumers.

If a 10 percent increase in income induced a group of consumers to reduce their yearly purchases of eggs by 5 percent, for these consumers,

A) the income elasticity of eggs equals approximately 1.05.
B) the income elasticity of eggs is 0.5.
C) eggs are a luxury good.
D) eggs are an inferior good.

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Learning Objectives

Related questions

If a 10 percent increase in income induced a group of consumers to reduce their yearly purchases of eggs by 5 percent, for these consumers,A) the income elasticity of eggs equals approximately 1.05.B) the income elasticity of eggs is 0.5.C) eggs are a luxury good.D) eggs are an inferior good.

Definitions

Learning Objectives

Learning Objectives

Related questions

If a 10 percent increase in income induced a group of consumers to reduce their yearly purchases of eggs by 5 percent, for these consumers,

A) the income elasticity of eggs equals approximately 1.05.
B) the income elasticity of eggs is 0.5.
C) eggs are a luxury good.
D) eggs are an inferior good.