Question

Match the Terms:

Income elasticity > 1
Price elasticity = -1
The percentage change in the quantity demanded due to a 1 percent change in income, holding preferences and relative prices constant
Any good the demand for which decreases as income increases and increases when income decreases, prices and preferences held constant
Price elasticity > -1 (absolute value)
The locus of all points representing the quantities demanded of a good at various levels of income, prices and preferencesheld constant
The percentage change in quantity demanded given a one percent change in price, income and preferences held constant
Shows the relationship between prices and the quantity demanded of 1 good
	Income elasticity
-	Price elasticity
-	Unitary price elasticity
-	Price elastic
	Demand curve
	Engel curve
-	Inferior good

Answer 1

1	Income elasticity˃1	No option is given. But it is luxury goods. The income elasticity of luxury goods is greater than 1.(YED ˃1.)
2	Price elasticity = -1	Inferior goods. Negative income elasticity is associated with inferior goods whose demand decrease with rise in income. (YED<0)
3	The percentage change in quantity demanded due to a 1 percent change in income, holding preference and relative prices constant.	Income elasticity. Income elasticity of demand explains the percentage change in quantity demanded of a good due to a given change in income. It assumes that the price of the good and preferences remaining constant.
4	Any good, the demand for which decreases as income increases and increases when income decreases, prices and preferences held constant	Inferior goods. The demand for inferior good decrease when income increases because the consumers substitute luxury goods in place of inferior goods.
5	Price elasticity˃-1	Price elastic. The demand is elastic when the elasticity is˃1.
6	The locus of all points representing the quantities demanded of a good at various levels of income, prices and preferences held constant	Angel curve. An angel curve shows the quantities demanded of a good at varying levels of consumer’s income. The theory assumes the price of the good and preferences of the consumer remaining constant.
7	The percentage change in quantity demanded given a one percent change in price, income and preference held constant.	Price elasticity. Price elasticity shows the percent change in quantity demanded due to a given percent change in price.
8	Shows the relationship between prices and the quantity demanded of 1 good	Demand curve. The demand curve shows the inverse relationship between demand and price of a commodity.