Income elasticity of demand measures how demand responds to a change in income. When it is greater than one, demand rises more than proportionately as income grows — the mark of a luxury good, on which consumers spend a rising share of income. Normal goods have positive income elastic …

Step 1 — Recall income elasticity ranges

• $E_y < 0$ → inferior good
• $0 < E_y < 1$ → normal necessity
• $E_y > 1$ → luxury good (superior good)

Step 2 — Apply to the stem

Since $E_y > 1$, demand grows faster than income; consumers devote a rising proportion of income to the good. This is the defining property of a luxury good.

Step 3 — Why the other options are wrong

• (A) Inferior goods — would need $E_y < 0$.
• (B) Normal goods — a broad class ($E_y > 0$); true but not specific, whereas $E_y>1$ pins it to a luxury (which is the precise answer expected). …