Lorena likes to play golf. The number of times per year that she plays depends on both the
a. Using the data under D1 and D2 , calculate the cross elasticity of Lorena’s demand for golf at all three prices. (To do this, apply the midpoints approach to the cross elasticity of
demand.) Is the cross elasticity the same at all three prices? Are movies and golf substitute goods, complementary goods, or independent goods?
b. Using the data under D2 and D3, calculate the income elasticity of Lorena’s demand for golf at all three prices. (To do this, apply the midpoint approach to the income elasticity
of demand.) Is the income elasticity the same at all three prices? Is golf an inferior good?
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