14. 7-5: Income Elasticity *4* When Braxton's income decreased 20 percent (-20%), his demand for shrimp decreased 16 percent (-16%). Braxton's income elasticity of demand for shrimp is (EX,I =): O " + 0.8 " and the demand for shrimp is "relatively inelastic". O "- 0.8 " and shrimp is an "inferior" good. O " + 1.25 " and the demand for shrimp is "relatively inelastic." O" + 1.25 " and the demand for shrimp is "relatively elastic". O" + 0.8 " and shrimp is a "normal" good.

14. 7-5: Income Elasticity 4 When Braxton's income decreased 20 percent (-20%), his demand for shrimp decreased 16 percent (-16%). Braxton's income elasticity of demand for shrimp is (EX,I =): O " + 0.8 " and the demand for shrimp is "relatively inelastic". O "- 0.8 " and shrimp is an "inferior" good. O " + 1.25 " and the demand for shrimp is "relatively inelastic." O" + 1.25 " and the demand for shrimp is "relatively elastic". O" + 0.8 " and shrimp is a "normal" good.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 15CTQ: Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the...

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