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SingaporeEconomicsQuick questions
Elasticity and Its Applications
Quick questions on Income and cross elasticity of demand explained: H2 Economics
5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is income elasticity of demand (YED)?Show answer
YED measures how responsive demand is to a change in consumer income. Its sign classifies the good and its size measures the strength of response:
What is cross elasticity of demand (XED)?Show answer
XED measures how responsive demand for one good is to a change in the price of another. Its sign reveals the relationship:
What is q1?Show answer
Income rises 10 percent and demand for a good falls 5 percent. Calculate YED and classify the good. [2 marks]
What is q2?Show answer
Explain why two goods with a strongly negative XED are complements. [2 marks]
What is q3?Show answer
Distinguish a necessity from a luxury using YED. [3 marks]
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