The income elasticity of demand is a measure of the responsiveness of the
A) quantity of a good demanded to changes in income.
B) quantity of a good demanded to changes in its price.
C) consumer's income to a change in the price of the goods he or she consumes.
D) quantity of a good demanded to changes in another good's price.

Question

Quizplus · Accepted Answer

The income elasticity of demand measures how the quantity demanded of a good changes in response to a change in consumers' income. It does not relate to changes in the good's price (B), changes in consumer income due to price changes (C), or the effect of changes in the price of another good (D).

The Income Elasticity of Demand Is a Measure of the Responsiveness