Final answer:
A good with a negative income elasticity coefficient is classified as an inferior good. Normal goods with an income elasticity coefficient less than one are called necessities, while those with a coefficient greater than one are known as luxury goods or superior goods.
Step-by-step explanation:
If a good has a negative income elasticity coefficient, then it is classified as an inferior good. Economists define normal goods as having a positive income elasticity. Normal goods can be further divided into two categories based on their income elasticity coefficient. Those with an income elasticity of less than one are called necessities, and those with an income elasticity greater than one are known as luxury goods or superior goods.
For example, basic food items might be considered necessities, while sports cars could be categorized as luxury goods. If another good has a negative income elasticity, meaning its demand decreases as income rises (inferior good), then any other good with a positive income elasticity would be classified as a normal good, either as a necessity or a luxury good depending on its income elasticity.