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Questions › IIT JAM › IIT JAM 2026 › Q29
2 marks, −0.667Microeconomics › Demand theory and elasticity › Income elasticity, normal and inferior goods and Engel curvesModerateabout 2 min

IIT JAM 2026 Question 29: Demand theory and elasticity

Consider the statements: I. Income elasticity of demand for a normal good is positive. II. Income elasticity of demand for an inferior good is negative. III. Income elasticity of demand for a luxury good is less than 1. Which one of the following options is CORRECT?

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Demand theory and elasticity has come up 161 times in 7 exams since 2004.

What this question tests

This question is on Income elasticity, normal and inferior goods and Engel curves, part of Demand theory and elasticity in Microeconomics.

How demand responds to income, how goods are classified by that response, and Engel's law.

TestStop has 33 past-paper questions on this subtopic; the nearest in year are below.

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Question from the IIT JAM 2026 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.