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
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.
Question : The price elasticity of demand is calculated as the percentage change in:
Question : The price elasticity of demand is calculated as the:
Question : Statement 1: When the price of a product increases by 10%, and its quantity demanded decreases by 5%, the price elasticity of demand is - 0.5.
Statement 2: The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the
Question : The elasticity of demand for price is:
Question : Statement 1: The concept of price elasticity of demand measures the responsiveness of quantity demanded to changes in income.
Statement 2: Price elasticity of demand can be calculated by dividing the percentage change in quantity demanded by the percentage change in
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile