d. Suppose that your demand schedule for motor vehicles is as follows: Quantity Demanded (income = $15,000) Quantity Demanded (income = $24000) Price 640 8500 7400 920 7150 6900 1120 6450 5830 1300 5895 5385 1430 4950 4730 Calculate your price elasticity of demand as the price of motor vehicles increases from $920 to $1300 when income is $15,000. Is the good elastic or inelastic? Calculate your income elasticity of demand as your income increases from $15,000 to $24,000 if the price moves from $640 to $1,120. What does the value tell you about the good? i. ii.
d. Suppose that your demand schedule for motor vehicles is as follows: Quantity Demanded (income = $15,000) Quantity Demanded (income = $24000) Price 640 8500 7400 920 7150 6900 1120 6450 5830 1300 5895 5385 1430 4950 4730 Calculate your price elasticity of demand as the price of motor vehicles increases from $920 to $1300 when income is $15,000. Is the good elastic or inelastic? Calculate your income elasticity of demand as your income increases from $15,000 to $24,000 if the price moves from $640 to $1,120. What does the value tell you about the good? i. ii.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:d. Suppose that your demand schedule for motor vehicles is as follows:
Quantity Demanded
(income = $15,000)
Quantity Demanded
(income = $24000)
Price
640
8500
7400
920
7150
6900
1120
6450
5830
1300
5895
5385
1430
4950
4730
Calculate your price elasticity of demand as the price of motor vehicles
increases from $920 to $1300 when income is $15,000. Is the good elastic
or inelastic?
Calculate your income elasticity of demand as your income increases
from $15,000 to $24,000 if the price moves from $640 to $1,120. What does
the value tell you about the good?
i.
ii.
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