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WAEC Economics 1999 Question 17

Question 17

Elasticity

Income elasticity of demand is the measurement of the responsiveness of

  1. A.price to changes in income
  2. B.quantity demanded to changes in income
  3. C.changes in expenditure to changes in income
  4. D.changes in expenditure to changes in price of the commodity
Show the answer and explanation

Answer: B (quantity demanded to changes in income)

Explanation

Income elasticity = % change in quantity demanded ÷ % change in income.