For each scenario, calculate the income elasticity of demand, determine whether the good is inferior or normal, and classify the good's income elasticity. When calculating the income elasticity of demand, use the midpoint formula. Round your answers to the nearest hundredth. Sylvia's annual salary increases from $100,500 to $109,500, and she decides to increase the number of vacations she takes p year from three to four. Calculate her income elasticity of demand for vacations. income elasticity vacations = Vacations are a As a good, vacations are Blake eats two bags of generic potato chips each day, and does not purchase any name-brand chips. Blake's hourly wage
For each scenario, calculate the income elasticity of demand, determine whether the good is inferior or normal, and classify the good's income elasticity. When calculating the income elasticity of demand, use the midpoint formula. Round your answers to the nearest hundredth. Sylvia's annual salary increases from $100,500 to $109,500, and she decides to increase the number of vacations she takes p year from three to four. Calculate her income elasticity of demand for vacations. income elasticity vacations = Vacations are a As a good, vacations are Blake eats two bags of generic potato chips each day, and does not purchase any name-brand chips. Blake's hourly wage
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:For each scenario, calculate the income elasticity of demand, determine whether the good is inferior or normal, and classify
the good's income elasticity. When calculating the income elasticity of demand, use the midpoint formula. Round your
answers to the nearest hundredth.
Sylvia's annual salary increases from $100,500 to $109,500, and she decides to increase the number of vacations she takes per
year from three to four. Calculate her income elasticity of demand for vacations.
income elasticity vacations
=
income elasticity of
Blake eats two bags of generic potato chips each day, and does not purchase any name-brand chips. Blake's hourly wage
increases from $8.75 to $15, and he decides to eat one name-brand bag and one generic-brand bag each day. Calculate
Blake's income elasticity of demand for generic potato chips.
generic chips
Vacations are a
=
As a good, vacations are
Generic potato chips are a
As a good, generic potato chips are
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