1.2.5 YED Flashcards
1
Q
Define YED
A
How much quantity demand will change due to income changes
Income would affect the purchasing of product/service
2
Q
YED eq
A
% change in qd / % change in income
3
Q
If yed is between 0 and 1 the demand is…
A
Inelastic
4
Q
If yed is more than 1 then demand is…
A
Elastic
5
Q
Yed < 0
A
Inferior good
(As income increases demand decreases)
6
Q
yed > 0
A
Normal necessity good
(As income increases demand increases)
7
Q
Yed > 1
A
Normal luxury good
(An increase in income = bigger increase in demand)
