1. Which product's demand reacts the most when income changes? 2. Which product's demand increases during a recession when incomes fall? Product Haircuts Ramen noodles Tobacco Table 2 Airline travel Income elasticity 1.36 -0.76 0.86 5.82

1. Which product's demand reacts the most when income changes? 2. Which product's demand increases during a recession when incomes fall? Product Haircuts Ramen noodles Tobacco Table 2 Airline travel Income elasticity 1.36 -0.76 0.86 5.82

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.

Question

am. 93.

1. Which product's demand reacts the most when income changes?
2. Which product's demand increases during a recession when incomes fall?
Product
Haircuts
Tobacco
Table 2
Airline travel
Income elasticity
Ramen noodles - 0.76
1.36
0.86
5.82

Which product's demand reacts the most when income changes?
Which product's demand increases during a recession when
incomes fall?

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