Final answer:
An income elasticity of demand (Ei) of 0.8 suggests that the good in question is a necessity, with demand increasing as income rises but at a slower rate than the increase in income.
Option 'd' is the correct.
Step-by-step explanation:
An income elasticity of demand (Ei) of 0.8 indicates that a good is a necessity. This is because income elasticity of demand measures how the quantity demanded of a good responds to a change in income.
Goods that are necessities tend to have positive income elasticity of demand values that are less than 1, which implies that as income rises, demand for the good increases, but at a slower rate than the increase in income.
In contrast, luxury goods have an income elasticity of demand greater than 1, meaning that their demand increases proportionally more than income increases.
Conversely, goods with a negative income elasticity of demand are classified as inferior goods, where a rise in income leads to a decrease in demand for these goods.