This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Calculate the income elasticity of demand for DVDs, where a 10 percent increase in income results in ... (Read 94 times)

tfester

  • Hero Member
  • *****
  • Posts: 534
on: Jun 30, 2018
Calculate the income elasticity of demand for DVDs, where a 10 percent increase in income results in a 20 percent increase in the demand for DVDs. Decide from your answer, whether DVDs are normal or inferior goods.

Question 2

Higher rates of anticipated inflation would tend to:
 a. increase velocity and decrease nominal GDP.
  b. increase velocity and increase nominal GDP.
  c. decrease velocity and decrease nominal GDP.
  d. decrease velocity and increase nominal GDP.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

fatboyy09

  • Sr. Member
  • ****
  • Posts: 358
Reply #1 on: Jun 30, 2018
Answer to Question 1

Income elasticity of demand for DVDs is +2 (+20 percent/ +10 percent = +2)

In general, if the income elasticity is positive, then the good in question is a normal good because income and demand move in the same direction. DVDs are normal goods because an increase in income results in an increase in demand.

Answer to Question 2

b


tfester

  • Hero Member
  • *****
  • Posts: 534
Reply #2 on: Jun 30, 2018
Thank you :)


fatboyy09

  • Sr. Member
  • ****
  • Posts: 358
Reply #3 on: Jun 30, 2018
Happy to help you


« previous next »
 

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

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?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

Did you know?

Prostaglandins were first isolated from human semen in Sweden in the 1930s. They were so named because the researcher thought that they came from the prostate gland. In fact, prostaglandins exist and are synthesized in almost every cell of the body.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

Browning and Gunning demonstrated that placental transfer tissues increase plant reproductive succes Browning and Gunning demonstrated that placental transfer tissues increase plant reproductive succes
A passenger train crosses Stony Creek Bridge in the Rocky Mountains in 1878. Railroads were importan A passenger train crosses Stony Creek Bridge in the Rocky Mountains in 1878. Railroads were importan
Calculate the number of grams of solute in 500.0 mL of 0.169 M KOH. Calculate the number of grams of solute in 500.0 mL of 0.169 M KOH.
How to calculate the gain and loss gene numbers with low bootstrap of phylogenetic tree? How to calculate the gain and loss gene numbers with low bootstrap of phylogenetic tree?
An electropherogram showing the results of a DNA profile analysis An electropherogram showing the results of a DNA profile analysis
An example of DNA profile results for the 13 original CODIS STRs An example of DNA profile results for the 13 original CODIS STRs
Video: Resting membrane potential - electrical polarity and maintenance requirements

For a complete list of videos, visit our video library