Final answer:
Income elasticity measures the change in demand in response to income changes, can be negative for inferior goods, and is calculated as the percentage change in demand over the percentage change in income. It is not always positive.
Step-by-step explanation:
The student asked about the correct statements pertaining to income elasticity of demand. The true statements are:
- Income elasticity measures the responsiveness of quantity demanded to a change in income, which is true.
- Income elasticity can be negative for inferior goods, this is also a true statement. Inferior goods are those for which demand decreases as consumer income rises.
- Income elasticity is calculated as the percentage change in quantity demanded divided by the percentage change in income, which again is a correct definition.
Thus, the false statement among the options given to the student is that 'Income elasticity is always positive'. This is not true since, as mentioned, it can be negative for inferior goods.
To summarize, the correct statements about income elasticity are that it measures the responsiveness of demand to changes in income and that it can be negative for inferior goods. The formula for calculating income elasticity is indeed the percentage change in quantity demanded divided by the percentage change in income.