Price and Income Elasticity of Demand (Edexcel A-Level Business): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What does income elasticity of demand measure?
What does income elasticity of demand measure?
How demand responds to income changes
What is the formula for income elasticity of demand?
What is the formula for income elasticity of demand?
% change in qty demanded ÷ % change in income
If income rises 10% and demand rises 25%, what is the income elasticity?
If income rises 10% and demand rises 25%, what is the income elasticity?
2.5
What does an income elasticity value of 0.5 indicate?
What does an income elasticity value of 0.5 indicate?
Income inelastic demand
What does a negative income elasticity value indicate?
What does a negative income elasticity value indicate?
An inferior good
Which product typically has income elastic demand?
Which product typically has income elastic demand?
Holidays
Which product typically has income inelastic demand?
Which product typically has income inelastic demand?
Essential goods like milk
Why do luxuries have income elastic demand?
Why do luxuries have income elastic demand?
Spending on them is discretionary
What happens to income elastic products during a recession?
What happens to income elastic products during a recession?
Demand falls sharply
How might producers of inferior goods respond to an expected recession?
How might producers of inferior goods respond to an expected recession?
Increase capacity