When a 5% increase in income causes a 3% drop in quantity demanded of a good Group of answer choices the cross-price elasticity is. 6 and the good is an inferior good. the income elasticity is 1.67 and the good is a normal good. the income elasticity is. 6 and the good is an inferior good.

the income elasticity is - 0.6 and the good is an inferior good.

Explanation:

Data provided as per the question below:-

Percentage change in quantity demanded = - 3%

Percentage change in income = 5%

The computation of Income elasticity of demand is shown below:-

Income elasticity of demand = Percentage change in quantity demanded : Percentage change in income

= - 3% : 5%

= - 0.6

The good is a lesser good since the quantity demanded does not increase but it falls by that profits.