Final answer:
The income elasticity of demand captures the degree to which the quantity demanded of a good changes in response to a change in income. In this case, a +2.00 elasticity means that for a 10% increase in income, toy purchases will increase by 20%, indicating that toys are a normal good.
Step-by-step explanation:
The student's question revolves around the concept of income elasticity of demand, a measure of how much the quantity demanded of a good responds to a change in consumers' income. When the income elasticity of demand is positive, it indicates that the good is a normal good, meaning that as income increases, the demand for the product also increases. In this specific case, with an income elasticity of demand for toys at +2.00, the correct answer is A: a 10% increase in income will increase the purchase of toys by 20%. This is because income elasticity measures the percentage change in quantity demanded resulting from a percentage change in income; hence, a positive income elasticity of +2.00 implies that the good in question is a normal good, not an inferior one, and will see an increased demand at a rate of two times the income increase.