Given the demand function for good x: Qx = 300 - 2Px + 3Py + 0.02Y, where price Px= 15, price Py = 5, and income Y = 4000. (a) Find the income elasticity of demand for Qx. (b) By the definitions in economics, is good x a luxury good or a necessity good in this case?

Economics:
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Chapter20: Elasticity: Demand And Supply
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Problem 13E: Using the following equation for the demand for a good or service, calculate the price elasticity of...
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Given the demand function for good x: Qx = 300 - 2Px + 3Py + 0.02Y, where price

Px= 15, price Py = 5, and income Y = 4000.

(a) Find the income elasticity of demand for Qx.

(b) By the definitions in economics, is good x a luxury good or a necessity good in this case?

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