YED Flashcards
1
Q
What does YED measure
A
measures relationship between a change in quantity demanded and change in income
2
Q
what is the equation for YED
A
% change in quantity demanded
% change in income
3
Q
if YED < 0 it is?
A
an inferior good
4
Q
if YED is between 0-1.5 it is?
A
a normal good
5
Q
if YED is > 1.5 it is?
A
luxury good
6
Q
what is a normal good
A
people buy of the good when they have more money
7
Q
what is an inferior good
A
people buy less when income increases
8
Q
what are the factors influencing YED
A
whether product is a necessity
who buys product
positive or negative elasticity
9
Q
what are the uses of YED
A
sales forecasting - impact on business if income changes
predict economic growth or decline
financial planning
