# ECONOMICS (CBSE/UGC NET)

## ECONOMICS

### ELASTICITY OF DEMAND

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The income elasticity of demand is a measure of the:
 A relative responsiveness of quantity demanded to changes in income. B absolute change in demand yielded by an absolute change in income. C slope of the income-consumption curve. D negative slope of a market demand curve.
Explanation:

Detailed explanation-1: -Income elasticity of demand is an economic measure of how responsive the quantity demanded for a good or service is to a change in income. The formula for calculating income elasticity of demand is the percentage change in quantity demanded divided by the percentage change in income.

Detailed explanation-2: -Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. It is computed as the percentage change in quantity demanded-or supplied-divided by the percentage change in price.

Detailed explanation-3: -The income elasticity of demand reflects the responsiveness of demand to changes in income. It is the percentage change in quantity demanded at a specific price divided by the percentage change in income, ceteris paribus. Income elasticity is positive for normal goods and negative for inferior goods.

Detailed explanation-4: -Income elasticity of demand measures the responsiveness of the quantity demanded for a good or service to a change in the income of the people demanding the good. It is calculated as the ratio of the percentage change in quantity demanded to the percentage change in income. Was this answer helpful?

Detailed explanation-5: -A measure of the responsiveness of quantity demanded to changes in the price of a related good is known as cross elasticity of demand. Cross elasticity of demand is calculated by dividing the proportionate change of quantity demanded of one commodity by the proportionate change of price of another commodity.

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