Q376
Normal goods have
A.
Positive income elasticity
AnswerB.
Negative income elasticity
C.
Fluctuating income elasticity
D.
Zero income elasticity
Answer: Option A
Solution
Answer: Option A
Solution:
Normal goods have Positive income elasticity. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand. If income elasticity of demand of a commodity is less than 1, it is a necessity good. If the elasticity of demand is greater than 1, it is a luxury good or a superior good.