# Calculating income elasticity of demand

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• Created by: 2022emily
• Created on: 07-12-22 09:15
What is income elasticity of demand?
Income elasticity of demand is the responsiveness of a product demand to a change in incomes
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Normal goods would do what to income and demand?
An increase in incomes leads to an increase in the quantity demanded
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Is normal goods positive or negative
Positive
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Inferior goods would do what to income and demand?
An increase in incomes will lead to a fall in demand or a decrease in income will lead to an increase in demand
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Is inferior goods positive or negative?
Negative
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What is the formula?
income of elasticity of demand = % change in quantity demanded / % change in income
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## Other cards in this set

### Card 2

#### Front

Normal goods would do what to income and demand?

#### Back

An increase in incomes leads to an increase in the quantity demanded

### Card 3

#### Front

Is normal goods positive or negative

### Card 4

#### Front

Inferior goods would do what to income and demand?

### Card 5

#### Front

Is inferior goods positive or negative?