Assume that Rajesh Singh’s income increased from $20000 per year to $30000 per year, and his demand for "store-brand" bread decreased from 80 loaves to 40 loaves per year. Which of the following most accurately describes Singh’s income elasticity for store-brand bread（）
A. Income elasticity is +1.00 and store-brand bread is a complimentary good.
B. Income elasticity is -0.60 and store-brand bread is an inferior good.
C. Income elasticity is -1.67 and store-brand bread is an inferior good.
参考答案：C
解析：
Average income is ($20000+$30000)/2=$25000, so the percentage change in income is ($30000-$20000)/$25000=40.00%. The average quantity of bread demanded is (80+40)/ 2=60 loaves, so the percentage change in the quantity of bread demanded is (40-80)/60=-66.67%. Income elasticity of store-brand bread is - 66.67/40=-1.67. Since Singh’s income elasticity of demand is negative, store-brand bread is an inferior good.