YED

Question 1

YED

Answer 1

measures the Responsiveness of quantity demanded given a change in income

Question 2

YED=

equation

Answer 2

% change in Qd/ %change in income

Question 3

normal good

Answer 3

positive relationship between income and demand. as income increases, demand increases

Question 4

inferior good

Answer 4

inverse relationshio with income.
as income increases, demand decreases and vice versa

Question 5

normal good

greater than 1

Answer 5

demand is income elastic. if income increases, demand for normal good will increase Proportionatly more than the increase in income

normal luxury

Question 6

normal good

less than 1

Answer 6

demand in income inelastic.
as incomes increase, demand for this normal good will rise, but proportionatly less than the incease in income

normal necessity

Question 7

inferior good

greater than 1

Answer 7

demand is income elastic

Question 8

inferior good

less than 1

Answer 8

demand is income inelastic