Income elasticity of demand is the percentage change in quantity demanded divided by the percentage change in income. Which type of goods have negative income elasticity of demand?

Inferior goods
Normal goods
Substitute goods
Complementary goods

The correct answer is A. Inferior goods.

Inferior goods are goods whose demand decreases as income increases. This is because as people’s income increases, they are able to afford more expensive goods, and inferior goods are seen as less desirable. For example, as people’s income increases, they may be less likely to buy cheap, low-quality clothing, and more likely to buy expensive, high-quality clothing.

Normal goods are goods whose demand increases as income increases. This is because as people’s income increases, they are able to afford more goods, and normal goods are seen as desirable. For example, as people’s income increases, they may be more likely to buy a new car, or a new house.

Substitute goods are goods that can be used in place of each other. For example, coffee and tea are substitute goods. If the price of coffee increases, people may be more likely to buy tea instead.

Complementary goods are goods that are used together. For example, cars and gasoline are complementary goods. If the price of cars decreases, people may be more likely to buy cars, and therefore more gasoline.

I hope this helps! Let me know if you have any other questions.