Use the figure below to answer Q9 & Q10: i Price ($) 0 900 A B D' (M $30,000) D (M $25,000) Qx 1,100 Quantity of good X Q9. What is the income elasticity of demand when income increases from $25,000 to $30,000? A. -1.10 B. -0.10 C. 0.18 D. 0.20 E. 1.10 Q 10. Based on the results, what can we conclude about this particular good? A. It is a normal good. B. It is an inferior good. C. It is a Giffen good. D. It has no close substitutes.

Use the figure below to answer Q9 & Q10: i Price ($) 0 900 A B D' (M $30,000) D (M $25,000) Qx 1,100 Quantity of good X Q9. What is the income elasticity of demand when income increases from $25,000 to $30,000? A. -1.10 B. -0.10 C. 0.18 D. 0.20 E. 1.10 Q 10. Based on the results, what can we conclude about this particular good? A. It is a normal good. B. It is an inferior good. C. It is a Giffen good. D. It has no close substitutes.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 15CTQ: Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the...

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What does a price elasticity of demand of 0.39 mean?
Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?
What is the formula for calculating elasticity?
1. tonya consumes 40 steaks a year when her yearly income is $40,000. after her income falls to $35,000 a year, she consumes only 35 steaks a year. Calculate her income elasticity of demand for steaks. 2. Figure: Midpoint Formula Refer to the figure. Using the midpoint as the base, what is the absolute value of the elasticity of demand between $40 and $60 ? A ) 0.8. B). C) 2.5 . D) 1.25. 22. Figure: Midpoint Formula P $80 60 40 20 0 4 12 16 20 Q Refer to the figure. Using the midpoint as the base, what is the absolute value of the elasticity of demand between $40 and $60? A) 0.8. B) 4/5. C) 2.5. D) 1.25.
Income Quantity of Good XPurchased Quantity of Good YPurchased $30 000 2 20 $40 000 5 10 Using the information in the above table, using the midpoint method, what is the income elasticity of good Y? Question 25 options: -1.20 1.33 -2.33 -3.33
120 100- Price ($) 80 60 40 20- 0 200 400 Demand Multiple Choice -0.50 -0.75 -1.00 -1.60 -2.00 600 800 1,000 1,200 Quantity In the figure above, what is the point price elasticity of demand when price is $80?
a) List FOUR main determinants of Income elasticity of demandb) The following relate to a consumer in a certain market:Income (Ksh) Price of X (Ksh) Demand for X Demand for Y5,000 15 30 1006,000 21 35 1208,000 30 40 150Required:Calculate the cross elasticity of demand as the price of X changes from Ksh. 15 to Ksh21 and interpret.QUESTION TWOIvy, a General Manager at Mumias Sugar Company, estimated a multiplicative demandfunction of the form: ?? = ???? ??1?0?0 using a cross-section data collected in thecompany sales on 30th June, 2016. The estimation results are as follows:Constant Price (P) Income (I) Price of Other Good (P0)Estimated coefficient 0.022 -0.223 1.354 0.133Standard Error 0.012 0.056 0.502 0.814t-statistic (1.19) (-3.98) -2.69 -0.13Number of Observations, n = 210; R-squared = 0.7516Critical Students' t = 1.96 at 5% Level of Significance2a) How would the coefficients and ?2 value be interpreted?b) What will the quantity demanded be if the values of the independent variables…
the pilge elasticity of cemand for a product is05. then a price cut fromn $3.00 to $2.70 wll Multiple Choice leBook, increase the quantity demanded by about 50 percent. decrease the quantity demanded by about 5 percent. 33好好好洛影 B888868 increase the quantity demanded by about 5 percent. increase the quantity demanded by about 20 percent. 15
19. Which of the following is true about income elasticity? explain A. Income elasticity refers to the response of the consumers in changing the amount of the good purchased when his income changes B. When the income elasticity is positive, the good is a normal good C. When the income elasticity is negative, the good is an inferior good D. Pork can be considered a normal good at a relatively low income but it can be considered an inferior good at a relatively higher income E. All are correct
A consumer's weekly income is $300, and the consumer buys 5 bars of chocolate per week. When weekly income increases to $330, the consumer buys 6 bars per week. The income elasticity of demand for chocolate 17 by this consumer is about Multiple Choice еВook 0. 0.52 1.91. Mc Graw Hill P Type here to search 10:31 AM 84°F Sunny 10/2/2021 2.
11 BIUA + Arlal I| II1 I I 2 The following questions are about income elasticity of demand. 9) Mr. Leon's income increased by 10%. (His "mommy" gave him a raise in his allowance because he was a "good little boy.") His consumption of Lego's then increased by 25%. Calculate his income elasticity. Does this imply that Lego's are a regular or an inferior product for Mr. Leon? 10) Mr. Mendivil's income increased by 20%. His consumption of pictures of Mr. Leon then decreased by 100%. Calculate the income elasticity of demand for the product. Does this imply that pictures of Mr. Leon are regular or inferior products? 11) Larry the Wild & Crazy Monkey saw a decrease in his income by 25%. With this, his consumption of berries increased by 50%. Calculate his income elasticity of demand. What can we conclude about berries as a consumer good for Larry the Wild & Crazy Monkey? Explain. ip lili 司

d. Give an approp rHate 2. Zulaikha and Ker Xin went to a shop to buy rice. Zulaikha wanted to buy 10kg of rice and Ker Xin wanted to buy RM20 worth of rice. Find the price elasticity of demand for each of them. 3. Nadzif always spends one-fifth of his income on food. Calculate his income elasticity of demand (use the midpoint formula). Page 1 / 1