The ____ the portion of your income spent on a good, the ____ is your demand for the good A. smaller; more price elastic B. larger; more price elastic

The the portion of your income spent on a good, the is your demand for the good A. smaller; more price elastic B. larger; more price elastic

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 31CTQ: Economists define normal goods as having a positive income elasticity. We can divide normal goods...

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Question

The ____ the portion of your income spent on a good, the ____ is your demand for the good

smaller; more price elastic

larger; more price elastic

larger; more income elastic

smaller; more income elastic

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When a good has an income elasticity of demand coefficient of 4.54 the _____. A. good is a normal good and it is income elastic B. good is a normal good and it is income inelastic C. good is an inferior good and it is income elastic D. good is an inferior good and it is income inelastic
a. a normal good; positive b. an inferior good; positive c. an inferior good; negative d. a normal good, negative
Consumer demand changes by the following amounts after a 15% increase in income: • the quantity demanded of candy canes increases by 5%. • the quantity of chestnuts demanded decreases by 15%. • the quantity of gingerbread cookies increases by 30%. a. Calculate the income elasticity of demand for each of these goods and indicate whether each is a normal or inferior good. b. Based on these elasticities, which one of these goods is a necessity and which one is a luxury?
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Suppose there is a single commodity that absorbs all of a consumer's income. a. What is the consumer's price elasticity of demand for the commodity? b. What is the consumer income elasticity of demand for the commodity?
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kindly solve the questions i posted
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1. Work out the Price Elasticity of Demand for each, and comment on your result. a) The price of a smartphone is currently £200, and the quantity demanded is 4m. Next year the price falls to £180 and the quantity demanded rises to 6m. b) The price of pens today is £1, and the quantity demanded is 1m. Next year the price rises to £1.10 and the quantity demanded falls to 950,000. c) The price of a daily newspaper today is £1.50p, and the quantity demanded is 2m. Next year the price falls by 30p and the quantity demanded rises to 2.2m
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