CA Foundation Exam > CA Foundation Questions > Calculate Income-elasticity for the household...
Start Learning for Free
Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%
- a)+ .5
- b)-.5
- c)+ 2
- d)-2
Correct answer is option 'C'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Calculate Income-elasticity for the household when the income of a hou...
% change in quantity demanded /%change in income =income elasticity
20/10=2
20/10=2
Free Test
FREE
| Start Free Test |
Community Answer
Calculate Income-elasticity for the household when the income of a hou...
Income Elasticity of Demand
Income elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in income. It is calculated as the percentage change in quantity demanded divided by the percentage change in income.
Formula:
Income Elasticity of Demand = Percentage change in Quantity Demanded / Percentage change in Income
Calculation:
Given, the income of a household rises by 10% and the demand for T.V. rises by 20%.
Percentage change in Quantity Demanded = (20/0) x 100 = 2000%
Percentage change in Income = (10/0) x 100 = 1000%
Income Elasticity of Demand = 2000 / 1000 = 2
Therefore, the income-elasticity for the household is 2.
Explanation:
When the income of a household rises by 10%, the demand for T.V. rises by 20%, which means that the demand for T.V. is sensitive to income changes. The income elasticity of demand in this case is positive, which means that as income increases, the demand for T.V. also increases.
In this case, the income elasticity of demand is 2, which indicates that the demand for T.V. is highly responsive to changes in income. A 1% increase in income leads to a 2% increase in demand for T.V.
Conclusion:
The income elasticity of demand is a useful tool for businesses and policymakers to understand how changes in income affect the demand for goods and services. In this case, the income-elasticity for the household is 2, which indicates that the demand for T.V. is highly responsive to changes in income.
Income elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in income. It is calculated as the percentage change in quantity demanded divided by the percentage change in income.
Formula:
Income Elasticity of Demand = Percentage change in Quantity Demanded / Percentage change in Income
Calculation:
Given, the income of a household rises by 10% and the demand for T.V. rises by 20%.
Percentage change in Quantity Demanded = (20/0) x 100 = 2000%
Percentage change in Income = (10/0) x 100 = 1000%
Income Elasticity of Demand = 2000 / 1000 = 2
Therefore, the income-elasticity for the household is 2.
Explanation:
When the income of a household rises by 10%, the demand for T.V. rises by 20%, which means that the demand for T.V. is sensitive to income changes. The income elasticity of demand in this case is positive, which means that as income increases, the demand for T.V. also increases.
In this case, the income elasticity of demand is 2, which indicates that the demand for T.V. is highly responsive to changes in income. A 1% increase in income leads to a 2% increase in demand for T.V.
Conclusion:
The income elasticity of demand is a useful tool for businesses and policymakers to understand how changes in income affect the demand for goods and services. In this case, the income-elasticity for the household is 2, which indicates that the demand for T.V. is highly responsive to changes in income.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer?
Question Description
Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer?.
Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer?.
Solutions for Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Calculate Income-elasticity for the household when the income of a household rises by 10% the demand for T.V. rises by 20%a)+ .5b)-.5c)+ 2d)-2Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup