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Economics (AS & A Level) · May / June 2024 · Paper 11 · Question 8

9708Price elasticity, income elasticity and cross elasticity of demand

Which statement is correct?

  1. ADemand for an inferior good has a positive relationship to income and a negative relationship to price.
  2. BDemand for an inferior good has a negative relationship to income and a negative relationship to price.
  3. CDemand for a normal good has a positive relationship to income and a positive relationship to price.
  4. DDemand for a normal good has a negative relationship to income and a positive relationship to price.

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Correct answer: B. Demand for an inferior good has a negative relationship to income and a negative relationship to price.

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