Of the following, which one is most likely to have a negative income elasticity of demand?

Of the following, which one is most likely to have a negative income elasticity of demand?

• A. Shoes.
• B. Inter-city bus travel.
• C. Tennis balls.
• D. Frozen yogurt.

Answer: (B)

Income elasticity of demand shows how much quantity demanded changes when income changes. A negative elasticity means the good is inferior: people buy less of it as their income rises. Inter-city bus travel fits this pattern because as incomes grow, travelers often substitute toward more expensive options like cars, trains, or flights, reducing demand for the cheaper bus option. The other items—shoes, tennis balls, and frozen yogurt—are typically normal goods, whose demand tends to increase as income rises, giving them positive income elasticities.

Income elasticity of demand shows how much quantity demanded changes when income changes. A negative elasticity means the good is inferior: people buy less of it as their income rises. Inter-city bus travel fits this pattern because as incomes grow, travelers often substitute toward more expensive options like cars, trains, or flights, reducing demand for the cheaper bus option. The other items—shoes, tennis balls, and frozen yogurt—are typically normal goods, whose demand tends to increase as income rises, giving them positive income elasticities.