The table shows the average income of households and the quantity demanded of products M and N at different prices and levels of income. Average Income $42, e00 Price of M $2.50 Year Quantity of M Price of N Quantity of N 1 105 $16 730 2.90 700 42,000 42,000 48, 000 100 16 2.90 95 28 670 4 2.90 105 28 710 a) What is the price elasticity of demand for product M between years 1 and 2? Round your answers to 2 decimal places.
The table shows the average income of households and the quantity demanded of products M and N at different prices and levels of income. Average Income $42, e00 Price of M $2.50 Year Quantity of M Price of N Quantity of N 1 105 $16 730 2.90 700 42,000 42,000 48, 000 100 16 2.90 95 28 670 4 2.90 105 28 710 a) What is the price elasticity of demand for product M between years 1 and 2? Round your answers to 2 decimal places.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The table shows the average income of households and the quantity demanded of products M and N at different prices and levels of
income.
Average Income
$42, e00
Year
Price of M
Quantity of M
Price of N
Quantity of N
1
$2.50
105
$16
730
2.90
700
42,000
42,000
100
16
2.90
95
28
670
4
48,000
2.90
105
28
710
a) What is the price elasticity of demand for product M between years 1 and 2? Round your answers to 2 decimal places.
b) What is the price elasticity of demand for product N between years 2 and 3? Round your answers to 2 decimal places.
c) What is the income elasticity of demand for product M between years 3 and 4? Round your answers to 2 decimal places.
d) What is the income elasticity of demand for product N between years 3 and 4? Round your answers to 2 decimal places.
e) What is the cross-elasticity of demand of product M for a change in the price of product N between years 2 and 3? Round your
answers to 2 decimal places and remember to enter a minus (-) sign to indicate negative values.
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