# A consumer spends all of her income on only one good. a) What is the income elasticity of demand...

## Question:

A consumer spends all of her income on only one good.

a) What is the income elasticity of demand for this good?

b) What is the own price elasticity of demand for this good?

## Income Elasticity of Demand

Income elasticity of demand is the rate at which quantity demanded changes as a result of the change in the income of the consumer, other things being equal.

## Answer and Explanation: 1

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View this answerLet the 'X' be the quantity of goods demanded.

Price of good = P

The income of consumer = Y

Consumer spends all her income on one good, therefore

...

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Chapter 2 / Lesson 13In microeconomics, the principle of income elasticity of demand, which illustrates the relationship between demand and income, is important to understand the field as a whole. In this lesson, dive into the definition of income elasticity of demand and understand how it impacts normal goods, necessities, and inferior goods.

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