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 525 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?

When taking monoamine oxidase inhibitors, people should avoid a variety of foods, which include alcoholic beverages, bean curd, broad (fava) bean pods, cheese, fish, ginseng, protein extracts, meat, sauerkraut, shrimp paste, soups, and yeast.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

Did you know?

Approximately 70% of expectant mothers report experiencing some symptoms of morning sickness during the first trimester of pregnancy.

Did you know?

Patients who have undergone chemotherapy for the treatment of cancer often complain of a lack of mental focus; memory loss; and a general diminution in abilities such as multitasking, attention span, and general mental agility.

Did you know?

More than 20 million Americans cite use of marijuana within the past 30 days, according to the National Survey on Drug Use and Health (NSDUH). More than 8 million admit to using it almost every day.

Worldwide Variations in Population and Income Levels Worldwide Variations in Population and Income Levels
The age-related increase in spirituality is different for two cohorts born seven years apart. The ... The age-related increase in spirituality is different for two cohorts born seven years apart. The ...
Distribution of the Income of Americans Distribution of the Income of Americans
How to calculate present value (Question 2) How to calculate present value (Question 2)
Infant mortality by income quintile, urban Canada, 1996 Infant mortality by income quintile, urban Canada, 1996
. Calculate the net electric field at point B . Calculate the net electric field at point B
Video: Phases of the ovarian cycle

For a complete list of videos, visit our video library