Subdecks (2)

Cards (11)

  • What does change in income result in
    changes to the demand for products
  • What does YED reveal
     how responsive the change in quantity demanded is to a change in income
  • How can YED be calculated
    %change in quantity demanded / % change in income
  • What is a good with a positive YED value considered to be and a negative YED value
    Positive YED value - A normal good - can be classified as necessities or luxuries
    Negative YED value - Inferior good
  • If the YED>1 what does that mean
    Luxury good - demand rises when income rises and demand falls when income falls - examples such as cars
  • If the YED is 0 -1 what does that mean
    Necessity good - demand is not very responsive to a change in income - foods like bread
  • If YED<0 what does that mean
    Inferior good - Demand rises when income falls - examples are public transport