Data collected from the economy of Royal City reveals that an 18% decrease in income leads to the following changes: • A 6% decrease in the quantity of chips demanded • A 17% increase in the quantity of spades demanded • A 29% decrease in the quantity of diamonds demanded Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on its income elasticity, indicate whether each good is a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign confers important information.) Good Income Elasticity of Demand Normal or Inferior Good Chips Spades Diamonds Which of the following three goods is most likely to be classified as a luxury good ? Diamonds Spades Chips

9. Application: Elasticity and hotel rooms The following graph input tool shows the daily demand for hotel rooms at the Oceans Hotel and Casino in Atlantic City, New Jersey. To help the hotel management better understand the market, an economist identified three primary factors that affect the demand for rooms each night. These demand factors, along with the values corresponding to the initial demand curve, are shown in the following table and alongside the graph input tool. Demand Factor Average American household income Roundtrip airfare from New Orleans (MSY) to Atlantic City (ACY) Room rate at the Meadows Hotel and Casino, which is near the Oceans Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. 500 450 400 350 300 250 200 150 100 50 0 Demand 0 50 100 150 200 250 300 350…

7. Using the income elasticity of demand to characterize goods A survey taken by residents from the imaginary town of Draw City tells economists that the following changes result from a 10% rise in income: • A 2% increase in the quantity of tokens demanded • A 17% decrease in the quantity of kings demanded • A 34% increase in the quantity of jokers demanded   Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on the income elasticities, classify each good as either a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign gives important information.) Good Income Elasticity of Demand Normal Good or Inferior Good Tokens -0.2         Kings           Jokers             Which of the following three goods is most likely to be…

Please help with following question    Suppose the own price elasticity of demand for good X is -4, its income elasticity is 2, its advertising elasticity is 3, and the cross price elasticity of demand between it and good Y is -6.  Determine how much the consumption of this good will change if: The price of good X increases by 10%. The price of good Y decreases by 5%. Advertising increases by 14%. Income decreases by 8%. thanks