Economics 9708 · AS & A Level · Income elasticity of demand

Income elasticity of demand — practice question

The diagram illustrates a market for a good that is met partly by domestic production and partly by imports. Sh represents domestic supply and Sw represents world supply. Domestic supply then moves to Sh1. After this change in supply, what will the consumption level and the related quantity of imports be?

  • Aconsumption OU, volume of imports TU
  • Bconsumption OU, volume of imports UV
  • Cconsumption OV, volume of imports TV
  • Dconsumption OV, volume of imports UV

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