Question
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Which of the following statements about the income elasticity of demand is correct? 

Answerlist
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* If the income elasticity of demand is positive, the good is said to be a normal good.
* The income elasticity of demand indicates how strongly the demand for a good reacts to a change in income.
* If the income decreases by 2% and thus the demand for a good decreases by 3%, it is called a luxury good.
* If the income elasticity of demand is negative, one speaks of an inferior good.
* The income elasticity of demand can be positive or negative.
* A Giffen good is a special case of an inferior good where demand increases if the price of the good increases.
* An income elasticity of demand equal to one means that the demand for the good increases proportional to the change in income.

* The income elasticity of demand indicates how strongly the demand for a good responds to a change of the price.
* If the income elasticity of demand is positive, the good is said to be inferior.
* The income elasticity of demand is the same for all goods.
* If the income elasticity of demand is zero, the good is called a luxury good.
* If the income elasticity of demand is greater than one, the good is called a normal good.
* The income elasticity of demand is the same for all consumers.
* The income elasticity of demand is independent of the good's price.
* The income elasticity of demand can range between zero and infinity.
* Giffen goods are luxury goods for which the demand decreases as income increases.
* Common goods are goods that are purchased preferentially by a certain part of the population.

Solution
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This question refers to the definition of income elasticity in
Varian (2014, _Intermediate Microeconomics: A Modern Approach_, 9th ed.), Chapter 15.

Meta-information
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exname: Income elasticity
extype: schoice
exsolution: 11111110000000000
exshuffle: 5
