Income and Cross Elasticities.

Question 1

If XED is positive, what type of good is it?

Answer 1

Substitute Good

Question 2

If XED is negative, what type of good is it?

Answer 2

Complement Good

Question 3

If YED is positive, what type of good is it?

Answer 3

Normal Good (As Income increases, demand increases)

Question 4

If YED is negative, what type of good is it?

Answer 4

Inferior Good (As income increases, demand decreases)