Answer to Question #288889 in Microeconomics for sia

Question

John`s income drops from 100.000 € to 90.000 €, so now he takes 3 holiday instead of What is his YED fo holidays?

Answer 1

Income Elasticity of demand is the the measure of change in quantity demanded due to change in come.

$YED=$ $\frac{\Delta D/D}{\Delta I/I}$

D=5

$\Delta D=5-3=2$

$\Delta I=100,000-90,000= 10,000$

=$\frac{2/5}{10,000/100,000}$

=$\frac{2}{5}\times \frac{100000}{10,000}$ = 4