Final answer:
Demand that is very sensitive to a change in price is described as elastic. When the quantity demanded changes significantly due to a price change, demand is considered elastic. The student's question pertains to this type of demand sensitivity.
Step-by-step explanation:
The student is asking about demand that is very sensitive to a change in price. The correct term for this is elastic demand. Elastic demand occurs when a small change in price leads to a significant change in the quantity demanded.This is contrasted with inelastic demand, where changes in price have little effect on the quantity demanded.
As for income elasticity of demand, it refers to how the quantity demanded of a good responds to a change in income. Generally, with a rise in income, the demand for normal goods increases which means the income elasticity of demand is positive. On the contrary, an inferior good sees a decrease in demand as income increases, implying a negative income elasticity of demand.
Inferior goods are products for which demand decreases as consumer income rises, which contrasts with the demand for normal goods which increases with an increase in income. For example, if individuals start buying more steak instead of hamburgers after receiving a higher income, hamburgers in this scenario are considered an inferior good.