Question no 3001 SSC CGL Tier 1 Genral Awareness Questions and Answers Online Test 85

SSC CGL Tier 1 :: GA Test 85

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1 .

The income elasticity of demand being greater than one, the commodity must be__

[ A ] a necessity
[ B ] a luxury
[ C ] an inferior good
[ D ] none of these

Answer : Option B

Explanation :

A positive income elasticity of demand is associated with normal goods: an increase in income will lead to a rise in demand. If income elasticity of demand of a commodity is less than 1, i t is a necessi ty good. I f the elasticity of demand is greater than 1, it is a luxury good or a superior good.

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