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 i. 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? ii. 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?

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 i. 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? ii. 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?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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