Income Elasticity Of Demand Flashcards
1
Q
How do you calculate income elasticity of demand
A
Percentage change in qd percentage change in income
2
Q
What is normal necessity good ?
A
Income income in elastic
Between 0 and 1
3
Q
What is a normal luxury good ?
A
Income elastic
1 and over
4
Q
What is an inferior good?
A
Income in elastic
0 and less
5
Q
Definition of income elasticity of demand
A
Measure of responsiveness of quantity demanded for one good to a change in income
6
Q
Definition of price of elasticity demand
A
Measure of responsiveness of quantity demanded of a good to a change in it price
7
Q
How to calculate elasticity of price
A
Change in qd / change in price
