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.

Economics

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.

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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