Income Elasticity of Demand Calculation Steps:

• Compute % change in income: (24,000 - 20,000) / 20,000 = 20%.
• Compute % change in expenditure (proxy for quantity, prices constant): X = (96 - 100) / 100 = -4%; Y = (224 - 200) / 200 = 12%; Z = (248 - 200) / 200 = 24%.
• Income elasticity (E_I) = (%Δ quantity) / (%Δ income): X = -0.2; Y = 0.6; Z = 1.2.
• Identify goods with E_I > 1.07: only Z qualifies.

Why C is correct:

• Z has E_I = 1.2 > 1.07, per definition of income elasticity where %ΔQ exceeds %ΔI by that ratio, indicating a luxury good.

Why the others are wrong:

• A: Y's E_I = 0.6 < 1.07, so not both Y and Z.
• B: No good W exists; X's E_I = -0.2 < 1.07.
• D: Y's E_I = 0.6 < 1.07.

Final answer: C. Z only