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IIA-BEAC-HS-P2 - BEAC Health and Safety Part 2

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NEW QUESTION: 1
For an inferior good:
A. The price elasticity of demand is positive; the income elasticity of demand is negative.
B. The price elasticity of demand is negative; the income elasticity of demand is negative.
C. The price elasticity of demand is negative; the income elasticity of demand is positive.
Answer: B
Explanation:
For an inferior good demand falls as income increases; the quantity demanded falls as price increases; this means the income elasticity and the price elasticity will both be negative.


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