passwella.
Menu

WAEC Economics 2009 Question 16

Question 16

Elasticity

If an increase in earnings leads to more of a commodity being demanded, the good is said to have

  1. A.positive income elasticity
  2. B.negative income elasticity
  3. C.positive cross elasticity
  4. D.negative cross elasticity.
Show the answer and explanation

Answer: A (positive income elasticity)

Explanation

Demand and income move in the same direction, so income elasticity is positive (a normal good).