The following table shows three demand schedules for a person who likes to play football and/or go swimming. In scenario S1, his income is $100,000 per year and swimming cost $18 each. In scenario S2, his income is also $100,000 per year, but the price of swimming rises to $22 per round. And in scenario S3, his income increases to $140,000 per year while swimming cost $22 per round. A. Use data under S1 and S2 to calculate the cross elasticity of demand for football at all three prices. (Use the midpoint formula) Is the cross elasticity the same at all three prices? What type of goods are football and swimming? Why? b. Use data under S2 and S3 to calculate the income elasticity of demand for football at all three prices. (Use the midpoint formula) Is the income elasticity the same at all three prices? Is football an inferior good? Why? Quantity Demanded Price S1 S2 S3 $100 30 20 30 70 50 30 60 40 80 40 100
The following table shows three demand schedules for a person who likes to
play football and/or go swimming. In scenario S1, his income is $100,000 per year
and swimming cost $18 each. In scenario S2, his income is also $100,000 per
year, but the
income increases to $140,000 per year while swimming cost $22 per round.
A. Use data under S1 and S2 to calculate the cross elasticity of demand for football
at all three prices. (Use the midpoint formula) Is the cross elasticity the same at all
three prices? What type of goods are football and swimming? Why?
b. Use data under S2 and S3 to calculate the income elasticity of demand for
football at all three prices. (Use the midpoint formula) Is the income elasticity the
same at all three prices? Is football an inferior good? Why?
Quantity Demanded
Price S1 S2 S3
$100 30 20 30
70 50 30 60
40 80 40 100
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