Learning Contents:                                                              ·          Degrees of   Income Elasticity of Demand Degrees of Income Elasticity of Demand Income elasticity measures “how sensitive the demand is to the change in income.” As a consumer’s income rises, his demand for goods and services also increases. But sometimes, Demand for goods and services decreases with a rise in consumer income. It basically, depends on what type of goods are we talking about? Generally, Goods are divided into three categories: a. Normal goods b. Inferior goods c. Necessary goods. Normal goods (High-quality goods) have positive income elasticity. Inferior goods (Low-quality goods) have negative income elasticity and Necessary goods have zero income elasticity. Therefore, a detailed explanation of various degrees of elasticity is given below: 1.       Positive Income Elasticity 1.1   More than unitary   income elastic demand 1.2     Unitary income elastic demand 1.3