The income elasticity of computers is positive

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Reference no: EM131244392

You hear that during the last recession in the early 1990s consumer incomes fell by 10% and the purchase of computers fell by 17%. From this you determine that:

a. since the income elasticity of computers is positive, computers are a normal good

b. since the income elasticity of computers is negative, computers are a normal good

c. since the income elasticity of computers is positive, computers are an inferior good

d. since the income elasticity of computers is negative, computers are an inferior good

Please show how to calculate income elasticity to find out if its positive or negative.

Reference no: EM131244392

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