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JAMB Economics 1982 Question 36

Question 36

Elasticity

If income rises from N200.00 to N250.00 and the amount spent on good X falls from N30.00 to N28.00, then good X is

  1. A.an income elastic good
  2. B.a normal good
  3. C.an inferior good
  4. D.demand elastic
  5. E.supply elastic.
Show the answer and explanation

Answer: C (an inferior good)

Explanation

Spending on X falls as income rises, so its income elasticity is negative, which marks an inferior good.