Fred's income has just risen from 940 per week to 1,060 per week. ...

[washai]

Fred's income has just risen from 940 per week to 1,060 per week. As a result, he decides to purchase 9 percent more steak per week. The income elasticity of Fred's demand for steak is
 
  A) 0.75.
  B) 0.90.
  C) 1.00.
  D) 1.33.

Question 2

Waldo buys only two items, pretzels and ham sandwiches. Waldo has 24 in income, pretzels cost 0.60 per bag and ham sandwiches cost 2.40 each. Which of the following statements is TRUE for the information given above?
 
  A) Waldo's real income expressed in terms of pretzels is 40 bags of pretzels.
  B) Waldo's real income expressed in terms of ham sandwiches is 10 ham sandwiches.
  C) The relative price of a ham sandwich in terms of pretzels is 4 bags of pretzels per ham sandwich.
  D) All of the above answers are correct.

[mochi09]

Answer to Question 1

A

Answer to Question 2

D

[washai]

Thank you

[mochi09]

Happy to help you