1.2.5

Question 1

What is YED?

Answer 1

The responsiveness of demand following a change in income.

Question 2

Formula of YED

Answer 2

% change in Quantity Demand / % change in Price

Question 3

If YED is positive what 2 types of normal goods could it be?

Answer 3

Luxury
Necessity

Question 4

What type of good is it when YED is negative?

Answer 4

Inferior

Question 5

What does it mean is YED>1?

Answer 5

Luxury good

When income rises demand rises

Question 6

Analyse a good which is YED 0-1

Answer 6

Necessity

Demand is not very responsive to a change in income.

Question 7

Analyse a good which YED is 0>YED

Answer 7

Inferior good

When income rises, the demand falls

Question 8

What are factors which effect YED

Answer 8

Factors which influence the wage of workers

Question 9

What are 2 ways YED helps businesses?

Answer 9

Production planning
Product Planning

Question 10

How does YED affect production planning?

Answer 10

Accurately predict whether they should increase or decrease production

Question 11

What will YED help product planning with?

Answer 11

Shows how much of which products they should make.