Day: July 24, 2017

If the Income Elasticity of Demand for a product is +2 and income rises by 10%, what will happen to sales?

Select ONE answer:

1. Rise by 5%
2. Decrease by 5%
3. Rise by 20%
4. Fall by 20%
5. Stay the same

Explain with a real-life example what is meant by an income-elastic product:
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 3 – Sales will rise by 20% i.e. YED of 2 * 10%.

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