A-LevelEconomicsThe price system and the microeconomy9708/12 · Oct/Nov 2012 · Q61 Mark

What can be concluded about a product which has an income elasticity of demand and a cross elasticity of demand (XED) of +1.2?

Athe product is an inferior good the product has a close complement

Bthe product is an inferior good the product has a close substitute

Cthe product is a normal good the product has a close complement

Dthe product is a normal good the product has a close substitute

✓ Correct answer

D: the product is a normal good the product has a close substitute

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Topic: The price system and the microeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Oct/Nov 2012 Paper 1 Variant 2, question 6.

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What can be concluded about a product which has an income elasticity of demand and a cross elasticity of demand (XED) of +1.2?

✓ Correct answer

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