Match the items of the List - I with those of the List - II and indicate the correct code :…
Positive income elasticity characterizes superior/normal goods where demand rises with income (a-iv); negative income elasticity characterizes inferior goods where demand…
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Match the items of the List - I with those of the List - II and indicate the correct code :
| List-I | List-II |
|---|---|
| (a) Positive income elasticity | (i) Substitute goods |
| (b) Negative income elasticity | (ii) Complementary goods |
| (c) Positive cross elasticity | (iii) Inferior goods |
| (d) Negative cross elasticity | (iv) Superior goods |
Answer and explanation
Correct answer C
Positive income elasticity characterizes superior/normal goods where demand rises with income (a-iv); negative income elasticity characterizes inferior goods where demand falls as income rises (b-iii); positive cross-price elasticity occurs between substitute goods (c-i); and negative cross-price elasticity occurs between complementary goods (d-ii).
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