Final answer:
Complement goods like computers and software have a negative cross-price elasticity, indicating that an increase in the price of one reduces the demand for the other. Income elasticity varies and goods can be categorised as necessities or luxuries, depending on whether their income elasticity is less than or greater than one.
Step-by-step explanation:
When discussing the relationship between computers and software, we can deduce that they are complementary goods, which means that the use of one increases the use of the other. If the price of software increases, the demand for computers is likely to decrease because they are used together. Therefore, the cross-price elasticity between computers and software is expected to be less than zero (negative).
Regarding income elasticity, if one good has a negative income elasticity, it is considered an inferior good, meaning demand for it decreases as consumer income rises. There is no requirement that the income elasticity of another good must be of any particular sign; it can be positive or negative depending on whether that good is a normal or inferior good itself. For normal goods, economists define two types based on income elasticity. Those with an income elasticity less than one are considered necessities, while those with an elasticity greater than one are termed luxuries.