Use a standard percentage change formula (“new” minus “old,” divided by “old”) to calculate income elasticities for goods A, B, and C below. Assume that in this economy per capita (per person) income has risen from $60,000 to $63,000, and other than the quantity changes below, all else is held constant. Per Capita Income QDa QDb QDc 60,000 14 65 100 63,000 18 60 102 What do the income elasticities you calculated tell you about goods A, B, and C?
Use a standard percentage change formula (“new” minus “old,” divided by “old”) to calculate income elasticities for goods A, B, and C below. Assume that in this economy per capita (per person) income has risen from $60,000 to $63,000, and other than the quantity changes below, all else is held constant. Per Capita Income QDa QDb QDc 60,000 14 65 100 63,000 18 60 102 What do the income elasticities you calculated tell you about goods A, B, and C?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Use a standard percentage change formula (“new” minus “old,” divided by “old”) to calculate income elasticities for goods A, B, and C below. Assume that in this economy per capita (per person) income has risen from $60,000 to $63,000, and other than the quantity changes below, all else is held constant.
| Per Capita Income | QDa | QDb | QDc |
| 60,000 | 14 | 65 | 100 |
| 63,000 | 18 | 60 | 102 |
What do the income elasticities you calculated tell you about goods A, B, and C?
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In column Es, I'm not sure how to get the results to show as .0583333 vs 58.33. I've included a copy of my formula.
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Transcribed Image Text:1 % Change in P % Change in Qs Es
2
3
4
5
6
7
14.29%
16.67%
20.00%
25.00%
33.33%
8.33
13.64
21.05
33.33 =B6/A6
50.00
J
58.33
81.82
105.26
150.00
QS
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