« previous next »

Author Question: Refer to Table 6-7. a. Using the information in the table, calculate the income elasticity of ... (Read 102 times)

mia

  • Hero Member
  • *****
  • Posts: 564
on: Jun 29, 2018
Refer to Table 6-7.
 
  a. Using the information in the table, calculate the income elasticity of demand for good X and characterize the good. Use the midpoint formula.
  b. Can you calculate the income elasticity of demand for good Y? If you can, show your calculation and characterize the good. If you cannot, explain why.

Question 2

Public goods are distinguished by two primary characteristics. What are they?
 
  A) nonrivalry and nonexcludability B) market failure and high prices
  C) government intervention and low prices D) rivalry and exclusivity
InMicro ¦ Hubbard, O'Brien ¦ 1st Edition
Buy Test-Bank


jlaineee

  • Sr. Member
  • ****
  • Posts: 380
Reply #1 on: Jun 29, 2018
Answer to Question 1

a. The income elasticity of demand for good X = (3 / 3.5 ) / (20,000 / 40,000 ) = (0.8571 / 0.5 ) = 1.71. X is both a normal good and a luxury.
b. Since both income and Py change, you cannot calculate the income elasticity for good Y. The income elasticity can be measured if a change in income causes the quantity of Y purchased to change, holding everything else constant.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

In women, pharmacodynamic differences include increased sensitivity to (and increased effectiveness of) beta-blockers, opioids, selective serotonin reuptake inhibitors, and typical antipsychotics.

Did you know?

There are over 65,000 known species of protozoa. About 10,000 species are parasitic.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

Stevens-Johnson syndrome and Toxic Epidermal Necrolysis syndrome are life-threatening reactions that can result in death. Complications include permanent blindness, dry-eye syndrome, lung damage, photophobia, asthma, chronic obstructive pulmonary disease, permanent loss of nail beds, scarring of mucous membranes, arthritis, and chronic fatigue syndrome. Many patients' pores scar shut, causing them to retain heat.

Did you know?

Barbituric acid, the base material of barbiturates, was first synthesized in 1863 by Adolph von Bayer. His company later went on to synthesize aspirin for the first time, and Bayer aspirin is still a popular brand today.

Periodic Table Periodic Table
Important Human Viral Table Important Human Viral Table
Use a step stool to help an infirm client get on and off the table. Use a step stool to help an infirm client get on and off the table.
How to calculate mean, median, and mode How to calculate mean, median, and mode
Christmas table decoration ideas Christmas table decoration ideas
Table salt. Table salt.
Video: Metabolic Rate, Heat and Thermoregulation - response to heat and cold stresses

For a complete list of videos, visit our video library