Economics - Elasticity - YED

What is the definition of income elasticity of demand?

• The responsiveness of consumer incomes to a change in quantity demanded

• The responsiveness of quantity demanded to a change in consumer incomes

• The change in quantity demanded divided by the change in consumer incomes

• The change in quantity demanded resulting from a change in prices

What is the equation for YED?

• 
  

  $\%\ Change\ in\ quantity\ demanded\ \div\%\ Change\ in\ consumer\ incomes$
  

• $\%\ Change\ in\ consumer\ incomes\ \div\%\ Change\ in\ quantity\ demanded$

• $\%\ Change\ in\ consumer\ incomes\ \div\%\ Change\ in\ price\ levels$

For normal goods, YED will typically be......

For inferior goods, YED will typically be..............

For luxury goods, YED be typically be......

If YED for a good is 0.7 and consumer incomes rise by 10%, what is the impact on quantity demanded?

• Increase by 7%

• Decrease by 7%

• Increase by 0.7%

• Decrease by 0.7%

In a recession, what type of product is it typically better to be manufacturing?

• Inferior

• Normal

• Luxury