1.

Income elasticity of demand measures the:

a) Percentage change in quantity demanded given a percentage change in income

b) Percentage change in price given a percentage change in income

c) Percentage change in quantity demanded given a percentage change in price

d) Percentage change in price given a percentage change in quantity demanded

2. Which of the following goods is likely to have a positive income elasticity of demand?

a) Generic medications

b) Staple food items

c) Luxury cars

d) Gasoline

3. A luxury good with an income elasticity of demand greater than 1 is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

4. An income elasticity of demand equal to 0 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

5. When the income elasticity of demand is negative, the good is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

6. The income elasticity of demand for necessity goods is typically:

a) Less than 1

b) Greater than 1

c) Equal to 1

d) Negative

7. Which of the following goods is likely to have an income elasticity of demand less than 1?

a) Luxury vacations

b) Basic healthcare services

c) High-end smartphones

d) Quality education

8. The formula for calculating income elasticity of demand is:

a) Percentage change in quantity demanded / percentage change in price

b) Percentage change in price / percentage change in quantity demanded

c) Percentage change in quantity demanded / percentage change in income

d) Percentage change in income / percentage change in quantity demanded

9. A positive income elasticity of demand indicates that the good is:

a) Inferior
b) Normal

c) Complementary

d) Substitute

10. An income elasticity of demand greater than 1 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

11. An income elasticity of demand less than 1 but greater than 0 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

12. An income elasticity of demand less than 0 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

13. The income elasticity of demand for luxury goods is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

14. The income elasticity of demand for necessities is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

15. The income elasticity of demand for normal goods is:

a) Positive

b) Negative

c) Zero

d) It depends on the specific good

16. A good with an income elasticity of demand equal to 1 is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

17. A good with an income elasticity of demand less than 1 is considered:

a) Inferior

b) Normal

c) Complementary
d) Substitute

18. A good with an income elasticity of demand greater than 1 is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

19. The income elasticity of demand for food is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

20. The income elasticity of demand for entertainment goods is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

21. The income elasticity of demand is calculated using:

a) Cross-price elasticity formula

b) Price elasticity of demand formula

c) Total revenue formula

d) Income formula
22. A zero income elasticity of demand indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

23. The income elasticity of demand for luxury vacations is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

24. The income elasticity of demand for generic medications is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

25. The income elasticity of demand for smartphones is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero
1. What is the concept of income elasticity of demand?

a) The measure of responsiveness of quantity demanded to a change in income

b) The measure of responsiveness of quantity supplied to a change in income

c) The measure of responsiveness of price to a change in income

d) The measure of responsiveness of consumer preferences to a change in income

2. Income elasticity of demand can be classified into three categories: elastic, inelastic, and ________.

a) Unitary

b) Perfect

c) Cross

d) Relative

3. When the income elasticity of demand is greater than 1, the good is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

4. When the income elasticity of demand is less than 1 but greater than 0, the good is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

5. When the income elasticity of demand is negative, the good is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

6. The formula for calculating income elasticity of demand is:

a) % change in quantity demanded / % change in price

b) % change in price / % change in quantity demanded

c) % change in quantity demanded / % change in income

d) % change in income / % change in quantity demanded

7. A positive income elasticity of demand indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

8. A negative income elasticity of demand indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

9. The income elasticity of demand for luxury goods is typically:

a) Greater than 1
b) Less than 1 but greater than 0

c) Negative

d) Zero

10. The income elasticity of demand for necessities is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

11. A necessity with an income elasticity of demand less than 1 is considered:

a) Elastic

b) Inelastic

c) Unitary

d) Perfect

12. A luxury good with an income elasticity of demand greater than 1 is considered:

a) Elastic

b) Inelastic

c) Unitary

d) Perfect

13. The income elasticity of demand for food is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

14. The income elasticity of demand for entertainment goods is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

15. The income elasticity of demand is calculated using:

a) Cross-price elasticity formula

b) Price elasticity of demand formula

c) Total revenue formula

d) Income formula

16. An income elasticity of demand equal to 0 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

17. An income elasticity of demand equal to 1 indicates that the good is:

a) Inferior

b) Normal

c) Complementary
d) Substitute

18. An income elasticity of demand greater than 1 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

19. An income elasticity of demand less than 1 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

20. A zero income elasticity of demand indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

21. The income elasticity of demand for luxury cars is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero
22. The income elasticity of demand for generic medications is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

23. The income elasticity of demand for vacations is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

24. The income elasticity of demand for gasoline is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

25. The income elasticity of demand for healthcare services is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero
26. The income elasticity of demand for smartphones is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d)

1. Income elasticity of demand measures the:

a) Percentage change in quantity demanded given a percentage change in income

b) Percentage change in price given a percentage change in income

c) Percentage change in quantity demanded given a percentage change in price

d) Percentage change in price given a percentage change in quantity demanded

2. Which of the following goods is likely to have a positive income elasticity of demand?

a) Luxury vacations

b) Staple food items

c) Generic medications

d) Public transportation

3. A good with an income elasticity of demand greater than 1 is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute
4. An income elasticity of demand equal to 0 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

5. When the income elasticity of demand is negative, the good is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

6. The income elasticity of demand for necessity goods is typically:

a) Less than 1

b) Greater than 1

c) Equal to 1

d) Negative

7. Which of the following goods is likely to have an income elasticity of demand less than 1?

a) Luxury vacations

b) Basic healthcare services

c) High-end smartphones

d) Quality education

8. The formula for calculating income elasticity of demand is:

a) Percentage change in quantity demanded / percentage change in price

b) Percentage change in price / percentage change in quantity demanded

c) Percentage change in quantity demanded / percentage change in income

d) Percentage change in income / percentage change in quantity demanded

9. A positive income elasticity of demand indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

10. An income elasticity of demand greater than 1 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

11. An income elasticity of demand less than 1 but greater than 0 indicates that the good is:

a) Inferior

b) Normal

c) Complementary

d) Substitute

12. An income elasticity of demand less than 0 indicates that the good is:

a) Inferior
b) Normal

c) Complementary

d) Substitute

13. The income elasticity of demand for luxury goods is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

14. The income elasticity of demand for necessities is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

15. The income elasticity of demand for normal goods is:

a) Positive

b) Negative

c) Zero

d) It depends on the specific good

16. A good with an income elasticity of demand equal to 1 is considered:

a) Inferior

b) Normal
c) Complementary

d) Substitute

17. A good with an income elasticity of demand less than 1 is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

18. A good with an income elasticity of demand greater than 1 is considered:

a) Inferior

b) Normal

c) Complementary

d) Substitute

19. The income elasticity of demand for food is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative

d) Zero

20. The income elasticity of demand for entertainment goods is typically:

a) Greater than 1

b) Less than 1 but greater than 0

c) Negative
d) Zero