Question : The percentage change in _______ divided by the percentage change in _______ is the income elasticity of demand.
Option 1: The quantity demanded; income
Option 2: Income; the price
Option 3: Income; the quantity demanded.
Option 4: The price; income
Answer (1)
15th Jan, 2024
Correct Answer: The quantity demanded; income
Solution :
The term "income elasticity of demand" refers to how responsive demand for a good is to variations in consumer income.
Hence option a is the correct answer.
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