6. Using the income elasticity of demand to characterize goods A survey taken by residents from the imaginary town of Cardsburgh tells economists that the following changes result from a 10% rise in income: - A 2% increase in the quantity of cheques demanded - A 17% decrease in the quantity of hearts demanded - A 34% increase in the quantity of clubs demanded Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on the income elasticities, classify each good as either a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign gives important information.) Good Income Elasticity of Demand Normal Good or Inferior Good Cheques L V Hearts L V clubs l V Which of the following three goods is most likely to be classified as a luxury good ? Hearts Cheques Clubs