If your salary increases by 30% and in response you increase your clothing purchases by 20%, income elasticity equals OA. 0.67; AN INFERIOR GOOD OB. 1.5; A LUXURY GOOD O C. 0.67; A NORMAL GOOD OD. 1.5; AN INFERIOR GOOD O E. 1.5; A NORMAL GOOD and clothing is

If your salary increases by 30% and in response you increase your clothing purchases by 20%, income elasticity equals OA. 0.67; AN INFERIOR GOOD OB. 1.5; A LUXURY GOOD O C. 0.67; A NORMAL GOOD OD. 1.5; AN INFERIOR GOOD O E. 1.5; A NORMAL GOOD and clothing is

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2) Ernesto is looking to purchase a new vehicle as his income has increased from $2,000 per month to $3,000 per month, so his purchase increases from 0 to 1 vehicle. He see's a new Mercedes Benz that decreased its price from $45,000 to $42,000. What is Ernesto's income elasticity of demand for a Mercedes Benz vehicle?
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What is the cross price elasticity?
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Answer number 3 with full solution
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