Engineering Board Exam Reviewer · Basic Economic Concepts · easy

Which of the following best describes "luxury" goods?

1. Goods that are not essential, with demand rising significantly as income increases
2. Goods with perfectly inelastic demand
3. Goods purchased regardless of price
4. Goods used only by producers

Answer

A. Goods that are not essential, with demand rising significantly as income increases

Solution

Luxury goods are not essential, and their demand increases significantly as income rises.

More Basic Economic Concepts questions

1. According to the law of demand, as the price of a good increases (all else equal), what happens to the quantity demanded?
2. According to the law of supply, as the price of a good increases (all else equal), what happens to the quantity supplied?
3. In a perfectly competitive market, how many buyers and sellers are typically present, and what is their influence on price?
4. A market situation with only one seller and many buyers is called:
5. A market situation with only one buyer and many sellers is called:
6. A market situation with only a few sellers dominating the market is called:
7. Which of the following best describes "necessity" goods in economics?

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