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Income Elasticity of Demand (YED)

Edexcel 9EB0T2-2bA-levelLesson packSubscription
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  • 39 marks
  • about 60 minutes
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About this resource

Edexcel Economics B (9EB0) Theme 2, Unit T2-2 (spec ref 2.2.4) — income elasticity of demand (YED): the formula, interpreting positive/negative values and their size (normal vs inferior goods; luxuries/income-elastic vs necessities/income-inelastic), the factors that determine YED, and how firms…

18 slides.

Lesson outline

  1. Do Now — Retrieval
  2. Why YED Matters to Firms
  3. Hinge Check — YED or PED?
  4. The YED Formula — Worked Example 1
  5. Hinge Check — Sign Tells You Normal or Inferior
  6. Worked Example 2 — An Inferior Good
  7. Comparing YED Across Products
  8. Hinge Check — Magnitude Tells You Necessity or Luxury
  9. Worked Example 3 — A Necessity, and What Determines YED
  10. What Determines the Size of YED?
  11. Hinge Check — Forecasting Over the Economic Cycle
  12. Guided Practice — Calculate and Classify
Unit bundleTheme 2 · The wider economic environment
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