Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.
Trending News
What is the effect of a change in income?
Average income increases from R20, 000 per annum to R22, 000 per annum. Quantity demanded per year increases 5000 to 6000 units. Which of the following is correct?
a)Demand is price inelastic
b)The good is inferior
c)Income elasticity is -2
d)The product is normal
2 Answers
- Anonymous9 years agoFavorite Answer
read the Q, and figure out which applies:
a)Demand is price inelastic = Quantity demanded does not respond to price
b)The good is inferior = Quantity demanded decreases when income increases
c)Income elasticity is -2 = Quantity demanded decreases twice as fast as income
d)The product is normal = Quantity demanded increases when income increases
- Sipra MLv 69 years ago
* 1st. you calculate the income elasticity of demand dq/dy . y/q . where, dq change in quantity demanded , dy is the change in income, y original income and q original demand. .
if the value is < 1 demand is inelastic. if the value is > 1 elastic.
* a.you have mentioned about the income changes and no reference to price change.