Question

Income elasticity of demand for normal goods is:

• A. Zero
• B. Negative
• C. Positive
• D. Infinity

Hint:

Exam Tip:
Income elasticity:

• Positive: Normal goods.
• Negative: Inferior goods.
• Zero: Necessity goods.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
Income elasticity of demand measures the responsiveness of quantity demanded to a change in income.

Step 2: Key Definition:
For normal goods, as income increases, demand increases.
So, income elasticity is positive.
For inferior goods, it is negative.

Step 3: Final Answer:
Therefore, option (C) is correct.