Suppose the price of good x has increased from Php5 to Php10 per unit. Using the illustration below (see attached image) 1.If the price of hamburger increases by 16% and the quantity demanded decreases by 6%, what is the price elasticity of demand? Is it elastic, inelastic or unitary elastic? 3. A 20 percent increase in Ramon’s income brings about a 30 percent decrease in the demand for locally made shoes. What is the income elasticity of demand? Is the good a normal good or an inferior good? Explain briefly your answer.
Suppose the price of good x has increased from Php5 to Php10 per unit. Using the illustration below (see attached image) 1.If the price of hamburger increases by 16% and the quantity demanded decreases by 6%, what is the price elasticity of demand? Is it elastic, inelastic or unitary elastic? 3. A 20 percent increase in Ramon’s income brings about a 30 percent decrease in the demand for locally made shoes. What is the income elasticity of demand? Is the good a normal good or an inferior good? Explain briefly your answer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose the
1.If the price of hamburger increases by 16% and the quantity demanded decreases by 6%, what is the
3. A 20 percent increase in Ramon’s income brings about a 30 percent decrease in the demand for locally made shoes. What is the income elasticity of demand? Is the good a normal good or an inferior good? Explain briefly your answer.
Transcribed Image Text:10
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