income elasticity of demand
A measure of the responsiveness of quantity demanded to a change in
income.
normal good
A good for which quantity demanded rises as income rises—its income
elasticity is positive.
inferior good
A good for which quantity demanded falls as income rises—its income
elasticity is negative.
necessities
Products for which the income elasticity of demand is positive but less
than one.
luxuries
Products for which the income elasticity of demand is positive and greater
than one.
cross elasticity of demand
A measure of the responsiveness of the quantity of one product
demanded to changes in the price of another product.
sellers’ preferences
Allocation of products in excess demand by decisions of the sellers.
(ηY)(ηxy)