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WorksheetsIncome Elasticity of Demand Quiz
Total questions: 15
Worksheet time: 8mins
What does YED stand for?
Yearly Elasticity of Demand
Yield Elasticity of Demand
Yield Effect of Demand
Income Elasticity of Demand
What is the formula for calculating YED?
% change in Qd / % change in price
% change in Qd / % change in income
% change in price / % change in income
% change in income / % change in Qd
What type of goods have a YED between 0 and 1?
Luxury goods
Normal goods
Inferior goods
Necessity goods
If a good has a YED greater than 1, it is classified as what?
Necessity good
Normal good
Luxury good
Inferior good
What is the YED of inferior goods?
Positive
Zero
Negative
Undefined
What does the Engel Curve illustrate?
The relationship between supply and demand
The relationship between income and supply
The relationship between income and demand
The relationship between price and demand
What happens to the demand for rice as income increases beyond a certain point?
It fluctuates randomly
It remains constant
It decreases
It increases proportionately
Which of the following is an example of a luxury good?
Basic food
Electricity
Public transport
Designer clothing
What is the YED for a good that is considered a necessity?
Exactly 1
Greater than 1
Less than 0
Between 0 and 1
How do businesses typically respond to rising incomes?
By reducing product variety
By lowering product quality
By improving product quality
By increasing product prices
What type of goods tend to have the highest positive YED values?
Service sector goods
Manufactured goods
Necessity goods
Primary goods
What is the effect of economic recessions on the demand for inferior goods?
Demand decreases
Demand fluctuates
Demand remains unchanged
Demand increases
Which of the following is NOT a characteristic of normal goods?
Positive YED
Negative YED
Demand falls as income falls
Demand rises as income rises
What is the YED for a good if a 5% increase in income leads to a 7% increase in quantity demanded?
1.4
0.75
1.33
0.2
The name of the curve that describes the relationship between consumers' income and quantity demanded for a good.
(a)
