Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
• Class :y10
• Lesson Topic: The Market System
• Scheme of Work: Income Elasticity
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
P&D
Planning and
Data
ALL
Lesson Objectives
(KNOWLEDGE)
Define and describe the term Income elasticity
MOST (ANALYSIS)
Examine and Analyse the concepts of income elasticity
SOME (EVALUATION )
Higher Evaluate the pros and cons & Justify your views of income elasticity
thinking
Skills
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
P&D
Planning and
Data
Planning Tools
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Define and
describe the
term Income
elasticity
[Grade E-D]
Examine and
Analyse the
concepts of
income elasticity
[Grade C-B]
Evaluate the pros
and cons &
Justify your
views of income
elasticity
[Grade A-A*]
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Keyword
Definition
Income elasticity
Income inelastic
Normal good
Inferior good
Discrectionary
CONNECTIVES
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
CONTRASTING
Although…
Except…
Moreover…
If…
However…
Yet…
Apart from…
Unless…
Despite…
As long as…
CAUSE & EFFECT
Consequently…
Due to…
As a result…
Therefore..
Because of…
Because…
CONCLUDING
Firstly…
After…
Secondly…
Before…
Overall…
I believe…
Finally…
I think …
In conclusion…
it depends…
To conclude…
short term…
Meanwhile…
Long term…
COMPARING
Equally…
As with…
Like…
In the same way…
Similarly…
Even so…
Likewise…
CONNECTIVES for Analysis
CONNECTIVES for Application
CONNECTIVES for Evaluation
EMPHASISING
Most importantly…
Significantly…
Notably…
Especially…
Above all…
In particular…
Indeed…
QUALIFYING
Despite…
Yet…
As long as…
Unless…
Apart from…
If…
Moreover…
Except…
However…
Although…
ADDING
In addition…
And…
Too…
Also…
Additionally…
As well as…
Furthermore…
ILLUSTRATING
For instance…
Such as…
In the case of…
So…
For example…
As revealed by…
As illustrated by…
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
ATD
A-A*
1. To what extent
2. Do you think
3. Evaluate whether
(8-10m) 10+ connectives & key words
C-B
Climb the Ladder
1. Explain
2. Compare
3. Analyse
(5-8m)
5+ connectives & key words
E-D
Apply to
demonstrate
1. Define
2. Describe
3. Identify
(2-4m) 2 + connectives & key words
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Intro..
• You’re income has increased by 500%
• What items do you;
a) Buy more off
b) Buy less off
c) Buy the same as before
(List 2 each)
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Intro..
• You’re income has increased by 500%
• What items do you;
a) Buy more off – INCOME ELASTIC, NORMAL GOODS
b) Buy less off – INCOME ELASTIC , INFERIOR GOODS
c) Buy the same as before – INCOME INELASTIC
(List 2 each)
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Income Elasticity of Demand (YED)
The responsiveness of
demand to a change in
INCOME
PRICE
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
YED is mostly positively correlated.
Demand
Income
UNRESPONSIVE
Demand
Income
As incomes
fall, demand
falls.. Vice
versa
RESPONSIVE
Big change in
demand…
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Income Elastic or Inelastic ?
Income
change (%)
Demand
change (%)
10%
20%
36%
50%
5%
25%
35%
70%
Elastic or
inelastic?
Inelastic
Elastic
Inelastic
Elastic
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
• Demand is ALWAYS on the top
• + = Normal good
- = Inferior good
YED =
- 0.4 = inelastic
- 1.6 = Elastic
% change in QUANTITY demanded
% change in INCOME
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
When the percentage rise in income is
rise in
smaller than the percentage …………….
demand then the good will be
income elastic
…………………….
When thepercentage
………………. fall in income is
fall in
greater than the percentage ………..
demand
………… then the good will be inelastic
….…………
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
List some items…
Luxury goods –
Discretionary
Necessities
YED > 1 i.e. income elastic
YED < 1 i.e. income inelastic
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Inferior Goods
These have a NEGATIVE YED
If incomes rise demand will FALL for these goods
List some more items…
• Own Label products
•
In a recession demand will rise – so firms producing inferior goods will benefit …… but
not all to the same extent ………….
A difficult point! Inferior goods can be either income elastic or income inelastic –
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Quick Quiz – True or False?
1. YED = % change in income/ % change in demand F
2. YED is always a positive number
F
3. If YED > 1, then the good is elastic T
4. If %change income > % change demand then the good is inelastic T
5. For Inferior goods, demand falls as income rises
T
6. 53% of 190 is 99 T
7. If YED = 2, a 10% rise in income for a normal good causes a 20% fall in demand F
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
PLENARIES
• Calculate YED – elastic / inelastic / normal / inferior?
•When UK income fell during a recession by 5%, the
demand for holidays to London rose by 20%.
•As the average UK income rose from £19,000 to 21,300,
demand for digital cameras rose from 180,000 to 193,000
units per month.
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
P&D
Planning and
Data
ALL
Lesson Objectives
(KNOWLEDGE)
Define and describe the term Income elasticity
MOST (ANALYSIS)
Examine and Analyse the concepts of income elasticity
SOME (EVALUATION )
Higher Evaluate the pros and cons & Justify your views of income elasticity
thinking
Skills
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
ATD
A-A*
1. To what extent
2. Do you think
3. Evaluate whether
(8-10m) 10+ connectives & key words
C-B
Climb the Ladder
1. Explain
2. Compare
3. Analyse
(5-8m)
5+ connectives & key words
E-D
Apply to
demonstrate
1. Define
2. Describe
3. Identify
(2-4m) 2 + connectives & key words
Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
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Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
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Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
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Economics Section: Income elasticity
Further Reading c.9
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the
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Income
elastic , income inelastic, normal good, inferior good, discretionary.
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Economics Section: Income elasticity
Further Reading c.9
Keywords – Income elastic , income inelastic, normal good, inferior good, discretionary.
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