Day: December 16, 2017

Economics Multiple Choice Question – 16 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

If demand is income elastic then?

Select ONE answer:

  1. A change in income leads to a bigger change in quantity demanded (in percentages)
  2. A change in price leads to a bigger change in quantity demanded (in percentages)
  3. An increase in income increases the quantity demanded
  4. An increase in income decreases the quantity demanded
  5. A fall in income decreases the quantity demanded

What is the value of the income elasticity if the demand is income elastic:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 3 – A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand. If income elasticity of demand of a commodity is less than 1, it is a necessity good. If the elasticity of demand is greater than 1, it is a luxury good or a superior good.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.