The income elasticity of demand for jewelry is 2.Other things equal,a 10 percent increase in consumer income will:

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The income elasticity of demand for jewelry is positive and greater than 1, meaning that it is a luxury good. Therefore, a 10 percent increase in consumer income will result in a greater than proportionate increase in the quantity of jewelry purchased. A 2 percent increase in income will result in a 4 percent increase in quantity demanded (2 x 10 percent). Therefore, a 10 percent increase in income will result in a 20 percent increase in quantity demanded (4 x 5 percent).

The Income Elasticity of Demand for Jewelry Is 2