Data collected from the imaginary economy of Tralfamadore reveals that an 18% decrease in income leads to the following changes: • A 6% decrease in the quantity of sogem demanded • A 17% increase in the quantity of kang demanded • A 29% decrease in the quantity of welk demanded Compute the income elasticity of demand for each of the goods described, and select the appropriate value in the following table. Then indicate whether the income elasticity for each good indicates that it 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 important information is conferred by the sign. Good Income Elasticity of Demand Normal or Inferior Good Sogem Kang Welk Which of the following three goods is most likely to be classified as a luxury good? O Sogem O Kang O Welk

Consider two markets: the market for cat food and the market for dog food. The initial equilibrium for both markets is the same, the equilibrium price is $4.50, and the equilibrium quantity is 31.0. When the price is $8.75, the quantity supplied of cat food is 75.0 and the quantity supplied of dog food is 105.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for dog food. Please round to two decimal places.

If income elasticity of demand for a good is positive, we say that good is a normal good.  You can use the following approach to calculate the income elasticity of demand for a good: Group of answer choices   % change in quantity supplied / % change in income   % change in income / % change in quantity demanded   % change in quantity demanded / % change in income   % change in quantity demanded / % change in income tax rates

Does this imply that ice cream and frozen yogurt are complements or substitutes and does that answer match your intuition for whether or not ice cream and frozen yogurt are complements or substitutes? If not, how can you account for the value of the cross price elasticity implied by the data?

Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is

51 Quantity Price Demanded i of $40 220 $60 180 The table above shows the change in quantity demanded when the price of a good increases from $40 to $60. Using the mid-point formula, we can calculate the price elasticity of demand for this good to be: Select one: а. 0.25 b. 0.50 C. 1.25 d. 2.00

Imagine that the table shows the quantity demanded of UGG boots at five different prices in 2021 and in 2022. Which of the following variables could cause the demand for UGG boots to change as indicated from 2021 to 2022? (Check all that apply.) A. The expectation that UGG boots will fall in price. B. A decrease in the price of UGG boots. C. An increase in the number of buyers. D. A decrease in the price of a complementary good. A Price $160 170 180 190 200 Quantity Demanded 2021 8,000 7.500 7,000 6,500 6,000 Quantity Demanded 2022 9,000 8,500 8,000 7,500 7,000

Consider two markets: the market for cat food and the market for dog food. The initial equilibrium for both markets is the same, the equilibrium price is $⁢3.50, and the equilibrium quantity is 31.0. When the price is $10.75, the quantity supplied of cat food is 75.0 and the quantity supplied of dog food is 103.0. For simplicity of analysis, the demand for both goods is the same. Using the midpoint formula, calculate the elasticity of supply for dog food. Please round to two decimal places.

Question 3 A certain household comprises of a couple, Adam (A) and Betty (B). They have lexicographic preferences over two goods G1 and G2 - A wants to consume as much of G1 as possible, before moving on to G2 whereas, for B, it is the opposite, she wants to consume as much of G2 as possible before moving on to G1.¹ Given their varying preferences, they decide to shop separately, after dividing the household income equally. The household income is $8. One difference to the usual setting - there are government restrictions in place so that no individual is allowed to buy more than two units of either good. Hint: Do not use mathematical brute force (like Calculus) to solve this problem. A simple diagram with appropriate budget lines, etc. should suffice. 1) Suppose prices are p= (P₁, P2) = (1,2). Denote the optimal choice of A and B as a= b= (b₁,b₂) respectively. Solve for a and b. (a1, a2) and