The table below shows estimates of the income elasticity of demand (YED) for four different consumer goods and services in an economy.
| Goods and services | Income elasticity of demand (YED) |
|---|---|
| Public transport | -0.5 |
| Budget supermarket goods | -1.2 |
| Premium coffee houses | +1.5 |
| Overseas holidays | +2.5 |
From the data, it may be concluded that an 8% fall in real household incomes would lead to
a 4%4\%4% fall in the demand for public transport.
a 1.2%1.2\%1.2% increase in the demand for budget supermarket goods.
a 12%12\%12% fall in the demand for premium coffee houses.
a 20%20\%20% increase in the demand for overseas holidays.
256 exam-style questions on AQA A Level Economics 1.3 Price determination in a competitive market, covering 1.3.1 The determinants of the demand for goods and services, 1.3.2 Price, income and cross elasticities of demand, 1.3.3 The determinants of the supply of goods and services, 1.3.4 Price elasticity of supply, 1.3.5 The determination of equilibrium market prices, and 1.3.6 The interrelationship between markets. Each one has a worked solution and a mark scheme showing where the marks go.