YED Flashcards
1
Q
What does YED measure?
A
How demand responds to a change in income, depends whether the good is a normal good or an inferior good
2
Q
When is YED always negative?
A
For an inferior good
3
Q
When is YED always positive?
A
For a normal good
4
Q
Demand of an inferior good falls as…
A
income rises
5
Q
Demand for a normal good rises…
A
with income
6
Q
Normal goods can be divided into?
A
Superior goods and Luxury
7
Q
Demand of a superior good rises…
A
more than proportionally to income
