A. Read pg. 55-56 in your textbook about Income Elasticity of Demand (YED) and answer the following questions in your notes
1. What is income elasticity of demand?
2. What is the equation for Income of Elasticity of Demand?
3. What is a normal good?
4. What is an inferior good?
5. What is a superior good?
B. Complete the assignment by posting your response to the questions below:
1. Give an example of a normal good, an inferior good, and a superior good.
2. What is the difference between PED and Income Elasticity of Demand (YED)?
3. Why are some goods Income elastic for demand and some goods are income inelastic for demand?
4.
Read the beginning of Student Workpoint 4.6 on page 56. Answer
questions 1 and 2 by calculating the consumer's YED for holidays and
explaining what the value means.
C. If you finish early, begin
reading about Cross Price Elasticity of Demand (XED) on pages 53 and 54.
Think about what the importance of XED is to producers and be prepared
to share.
