{"id":56249,"date":"2024-04-16T00:41:23","date_gmt":"2024-04-16T00:41:23","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=56249"},"modified":"2024-04-16T00:41:23","modified_gmt":"2024-04-16T00:41:23","slug":"income-elasticity-is-computed-by-the-formula","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/","title":{"rendered":"Income elasticity is computed by the formula"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;$${e_i} = \\frac{{{Q_1} &#8211; {Q_2}}}{{{P_1}}}$$&#8221; option2=&#8221;$${e_i} = \\frac{{\\frac{{{Q_2} &#8211; {Q_1}}}{{{Q_1}}}}}{{\\frac{{{Y_2} &#8211; {Y_1}}}{{{Y_1}}}}}$$&#8221; option3=&#8221;$${e_i} = \\frac{{{Q_2} &#8211; {Q_1}}}{{{Q_1}}} \\times \\frac{{{Y_1}}}{{{Y_2} &#8211; y}} \\times 100$$&#8221; option4=&#8221;$${e_i} = \\frac{{{Y_1} &#8211; {Q_1}}}{{{Y_2} &#8211; {Q_2}}}$$&#8221; correct=&#8221;option2&#8243;]<!--more--><\/p>\n<p>The correct answer is B.<\/p>\n<p>Income elasticity is a measure of how much the quantity demanded of a good or service changes in response to a change in income. It is calculated as the percentage change in quantity demanded divided by the percentage change in income.<\/p>\n<p>The formula for income elasticity is:<\/p>\n<p>$$e_i = \\frac{{\\frac{{{Q_2} &#8211; {Q_1}}}{{{Q_1}}}}}{{\\frac{{{Y_2} &#8211; {Y_1}}}{{{Y_1}}}}}$$<\/p>\n<p>where:<\/p>\n<ul>\n<li>$e_i$ is income elasticity<\/li>\n<li>$Q_1$ is the quantity demanded at income level $Y_1$<\/li>\n<li>$Q_2$ is the quantity demanded at income level $Y_2$<\/li>\n<li>$Y_1$ is the initial income level<\/li>\n<li>$Y_2$ is the final income level<\/li>\n<\/ul>\n<p>Option A is the formula for price elasticity of demand. Option C is the formula for cross-price elasticity of demand. Option D is not a valid formula.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;$${e_i} = \\frac{{{Q_1} &#8211; {Q_2}}}{{{P_1}}}$$&#8221; option2=&#8221;$${e_i} = \\frac{{\\frac{{{Q_2} &#8211; {Q_1}}}{{{Q_1}}}}}{{\\frac{{{Y_2} &#8211; {Y_1}}}{{{Y_1}}}}}$$&#8221; option3=&#8221;$${e_i} = \\frac{{{Q_2} &#8211; {Q_1}}}{{{Q_1}}} \\times \\frac{{{Y_1}}}{{{Y_2} &#8211; y}} \\times 100$$&#8221; option4=&#8221;$${e_i} = \\frac{{{Y_1} &#8211; {Q_1}}}{{{Y_2} &#8211; {Q_2}}}$$&#8221; correct=&#8221;option2&#8243;]<\/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-56249","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Income elasticity is computed by the formula<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Income elasticity is computed by the formula\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;$${e_i} = frac{{{Q_1} &#8211; {Q_2}}}{{{P_1}}}$$&#8221; option2=&#8221;$${e_i} = frac{{frac{{{Q_2} &#8211; {Q_1}}}{{{Q_1}}}}}{{frac{{{Y_2} &#8211; {Y_1}}}{{{Y_1}}}}}$$&#8221; option3=&#8221;$${e_i} = frac{{{Q_2} &#8211; {Q_1}}}{{{Q_1}}} times frac{{{Y_1}}}{{{Y_2} &#8211; y}} times 100$$&#8221; option4=&#8221;$${e_i} = frac{{{Y_1} &#8211; {Q_1}}}{{{Y_2} &#8211; {Q_2}}}$$&#8221; correct=&#8221;option2&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-16T00:41:23+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Income elasticity is computed by the formula","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/","og_locale":"en_US","og_type":"article","og_title":"Income elasticity is computed by the formula","og_description":"[amp_mcq option1=&#8221;$${e_i} = frac{{{Q_1} &#8211; {Q_2}}}{{{P_1}}}$$&#8221; option2=&#8221;$${e_i} = frac{{frac{{{Q_2} &#8211; {Q_1}}}{{{Q_1}}}}}{{frac{{{Y_2} &#8211; {Y_1}}}{{{Y_1}}}}}$$&#8221; option3=&#8221;$${e_i} = frac{{{Q_2} &#8211; {Q_1}}}{{{Q_1}}} times frac{{{Y_1}}}{{{Y_2} &#8211; y}} times 100$$&#8221; option4=&#8221;$${e_i} = frac{{{Y_1} &#8211; {Q_1}}}{{{Y_2} &#8211; {Q_2}}}$$&#8221; correct=&#8221;option2&#8243;]","og_url":"https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-16T00:41:23+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/","url":"https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/","name":"Income elasticity is computed by the formula","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2024-04-16T00:41:23+00:00","dateModified":"2024-04-16T00:41:23+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/income-elasticity-is-computed-by-the-formula\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"mcq","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/"},{"@type":"ListItem","position":3,"name":"Economics","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/economics\/"},{"@type":"ListItem","position":4,"name":"Income elasticity is computed by the formula"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/56249","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=56249"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/56249\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=56249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=56249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=56249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}