[amp_mcq option1=”Rises” option2=”Falls” option3=”Remains unchanged” option4=”Becomes Zero” correct=”option1″]<\/p>\n
The correct answer is A. Rises.<\/p>\n
Income elasticity of demand is a measure of how responsive the demand for a good or service is to changes in consumer income. It is calculated as the percentage change in the quantity demanded divided by the percentage change in income.<\/p>\n
A positive income elasticity of demand means that the demand for a good or service increases as income increases. This is because as people have more money, they are able to afford to buy more of the good or service.<\/p>\n
A negative income elasticity of demand means that the demand for a good or service decreases as income increases. This is because as people have more money, they are able to afford to buy more of other goods and services, and so they buy less of the good or service in question.<\/p>\n
An income elasticity of demand of zero means that the demand for a good or service does not change as income changes. This is because the good or service is considered to be a necessity, and so people will buy the same amount of it regardless of their income.<\/p>\n
In conclusion, the correct answer is A. Rises.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Rises” option2=”Falls” option3=”Remains unchanged” option4=”Becomes Zero” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-46798","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n