Category: Economics

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:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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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Price elasticity of demand measures?

Select ONE answer:

1. % change in quantity demanded compared to % change in price
2. % change in quantity supplied compared to % change in price
3. % change in price compared to % change in supply
4. % change in quantity demanded compared to % change in income
5. % change in quantity demanded compared to % change in advertising

Explain what is meant by price-inelastic demand:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 1 – The price elasticity of demand measures the sensitivity of the quantity demanded to changes in the price.

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