International Baccalaureate Economics (Chapter 3: Elasticities) Flashcards on 3.3: Income Elasticity of demand (YED), created by Jasmine Wells on 11/01/2016.
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Created by Jasmine Wells
over 8 years ago
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Created by Jasmine Wells
over 8 years ago
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What is income elasticity of demand?
What is the formula for YED?
What is the significance of YED in the case of a normal good?
What is the significance of YED in the case of an inferior good?
Describe YED in the case of necessities.
Describe YED in the case of luxuries.
Describe necessities being luxuries for people with lower incomes.
During times of economic growth, describe effects of goods with income elastic demand.
During times of economic growth, describe the effects of goods with income inelastic demand.
Describe effects of income elastic goods during times of recession.
Describe effects on income inelastic goods during times of recessions.
When an economy grows what occurs to the countries output?
As incomes rise, what two sectors of production benefit the most and why?
