JAMB Economics 2015 Paper

Concept:Income elasticity of demand measures how quantity demanded responds to a change in consumer income.Explanation:For normal goods, an increase in income leads to an increase in demand.Thus, the percentage change in quantity demanded and the percentage change in income move in the same direction.Income elasticity of demand is calculated as:$$E_y = \frac{\% \Delta Q_d}{\% \Delta Y}$$Since both changes are positive for normal goods, the value of $E_y$ is positive.Answer:B. positive