question archive What do we call a good with an income elasticity that is negative? a
What do we call a good with an income elasticity that is negative? a
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What do we call a good with an income elasticity that is negative?
a. substitute
b. complement
c. normal
d. inferior
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The answer is d).
When income elasticity is negative, it means that consumers consume less of a good when income increases, holding all else constant. This type of good is called inferior good, that people will "hate" it once they get richer.
