YED

YED

1. The responsiveness of the % demand of one good in regards to a % chanage in income

2. % change in quantity demand / % change in income

3. normal good

   • as income rises demand for the good will rise - positive elasticity

4. inferior good

   • a rise in income leads to a fall in demand while a fall in income leads to a increase in demand e.g buses vs cars

5. 1>

   • quantity demanded is rising by a greater % than income = income elastic