CAIE A-Level Economics 2.2.3 Elasticity coefficients

CAIE A-Level Economics 2.2.3 Elasticity coefficients
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise interpreting elasticity coefficients to classify goods, predict demand changes and judge relationships between products.

How this is tested

  • use signs of YED and XED to classify inferior goods, normal goods, substitutes and complements
  • interpret coefficient size to compare weak and strong product relationships or responsiveness
  • predict revenue or demand effects during growth or recession from given elasticity values

Question 8

[Maximum number: 1]

Which statement is true if the income elasticity of demand for a good has a value of -0.2 ?

A

When income rises less of the good is bought.

B

When income rises more of the good is bought.

C

When price falls more of the good is bought.

D

When price rises less of the good is bought.