00:01
So here we're talking about income elasticity of demand, right? so when we're talking, sorry, yeah, income elasticity.
00:09
So what is exactly the income elasticity of demand, right? we are trying to calculate how quantity demand it responds to a change in income, right? that is the definition of income elasticity of demand, right? so if you sort of imagine drawing a curve, you could imagine drawing a curve thinking, i want to know how income changes with the quantity demanded.
00:35
Now, usually this will slope up, right? you'll have a positive relationship because for most goods, as we get richer, we want to buy more of them, right? that's why they're called normal goods.
00:46
So when we're moving up and down this curve, we're trying to calculate the curvature of it, right? what we're doing is letting y change and why is income.
01:00
And as we let y change, we want to see how qd changes.
01:05
That's the goal, the responsiveness of qd to y...