Joe received a promotion this year at work and now has an income which has increased by 21% since last year. Joe has now increased his quantity demanded of red wine by 7%. In this example, Joe's
cross-price elasticity is 3 and the good is an inferior good.
income elasticity is .33 and the good is an inferior good.
income elasticity is .33 and the good is a normal good.
Answer- income elasticity is .33 and the good is a normal good.