If the income elasticity of demand for Good X is 1.5, a 4% increase in consumer income will increase the quantity demanded of Good X by
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1 mark, −0.33MicroeconomicsDemand theory and elasticityIncome elasticity, normal and inferior goods and Engel curvesEasyabout 1 min
UoH 2013 Question 12: Demand theory and elasticity
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Demand theory and elasticity has come up 161 times in 7 exams since 2004.
What this question tests
This question is on Income elasticity, normal and inferior goods and Engel curves, part of Demand theory and elasticity in Microeconomics.
How demand responds to income, how goods are classified by that response, and Engel's law.
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