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The income elasticity for a product is +0.5. You know that... This good is a normal...

The income elasticity for a product is +0.5. You know that...

This good is a normal good. It is also a necessity.

This good is a normal good. It is also a luxury good.

This good is an inferior good.
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Answer #1

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Option 1
      
This good is a normal good. It is also a necessity.
An income elasticity shows a relationship between the demand for a good and income if income elasticity is positive means the good is normal otherwise it is inferior.
Also, if the elasticity is above +1, then the good is luxurious or not necessary. It is necessary because the elasticity of income is +0.5 which means a change in income of 1% quantity changes by 0.5%

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