“The income elasticity of a good is positive if a consumer increases the total spending on that good as a result of an increase in its market price.” Do you agree or disagree? Why?

What will be an ideal response?

ANSWER:

Disagree. If a consumer increases the total spending on a good when the price of that good increases, then the good will have a price inelastic demand. The income elasticity of a good is positive if its demand increases as result of an increase in income.