Focusing on YED, please explain the type of Goods?
Normal good: 1 or greater than 1, as YED increases, QD for a good increases too.
Superior/ Luxury good: Also a normal good: it makes up a large proportion of consumption e.g. a new car. (Scarce to buy/ high price)
Inferior Good: Less than 1. As YED rises, QD falls as the consumer has more money to spend on ''better'' alternamtives. E.g. Macdonalds is an inferior good.
VL
Related Economics A Level answers
All answers ▸What drives inflation and why is it essential to modern economies?
Explain what is meant by a semi-fixed exchange rate? With reference to the BBC news story in the link below, explain why the Nigerian central bank increased interest rates and devalued their currency (the naira)?
Can firms in a perfectly competitive market make supernormal profits?
1) Evaluate potential strategies that could be adopted by an economy that is heavily dependent on primary products to aid development (25 marks)