Income elasticity of demand

Question 1

example of goods which demand is increased when income decreases

Answer 1

budget food and necessities

Question 2

examples of goods that demand increases when income increases

Answer 2

Luxury goods (e.g. holidays)

Question 3

what is a normal good?

Answer 3

Demand rises as income rises+ vice versa.
always a positive value

Question 4

what is an inferior good?

Answer 4

demand falls as income rises and vice versa- negative value

Question 5

what makes a luxury good

Answer 5

a positive sign of 1+ is an even better normal good. Classed as a luxury good

Question 6

Income Elasticity of Demand equation

Answer 6

YED= %change in quantity demanded/ %change in income