JAMB Economics 2008 Objective — Question 9

Question 9 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2008 Objective paper, with the correct answer and a full explanation.

If income rises from #2000 to #4,000 and quantity demanded increases from 80 units to 120 units, find the income elasticity of demand

A. 0.5Correct
B. 2
C. 2.5
D. 0

Explanation

Income elasticity = (%change in quantity)/(%change in income) = [(120-80)/80]/[(4000-2000)/2000] = 0.5/1.0 = 0.5.

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