Lesson Plan

• Describe how income elasticity of demand measures the responsiveness of quantity demanded to changes in consumer income.
• Explain how the sign and magnitude of the coefficient identify normal, inferior, necessity and luxury goods.
• Interpret the policy and business implications of different income‑elasticity values.
• Apply the elasticity formula to calculate expected quantity changes from income forecasts.

• Projector and screen
• Whiteboard and markers
• Printed worksheet with income‑elasticity tables
• Calculator or spreadsheet software
• Sample data set of goods and income levels

Imagine how a rise in household income reshapes the market for luxury cars versus staple foods. Students already understand price elasticity and the use of percentage changes. By the end of the lesson they will be able to identify the sign and size of income elasticity and explain its economic significance.

1. Do‑now (5') – quick quiz reviewing price‑elasticity concepts.
2. Mini‑lecture (10') – introduce the income‑elasticity formula and interpret the sign of the coefficient.
3. Guided practice (12') – work through examples classifying goods (normal, inferior, necessity, luxury) using a prepared table.
4. Group activity (15') – analyse a data set, calculate ε_y for several goods, and discuss policy/business implications.
5. Concept check (8') – exit‑ticket: write one implication of a positive elasticity greater than 1.
6. Summary & homework briefing (5') – recap key points and assign the worksheet for further practice.

We revisited why relative percentage changes matter and how the size and sign of income elasticity guide policy and business decisions. Students submit an exit‑ticket summarising one key implication, reinforcing retrieval. For homework, they complete the worksheet calculating ε_y for additional goods and prepare a short paragraph on how a change in national income would affect each.