Year 1 2 Income $10,000 $10,000 Using the above table and the Midpoint Method for Elasticity, suppose now that the income in year 1 increases from $10,000 to $20,000, and as a result, the quantity demanded for good y in year 1 changes from 20 units to 30 units. What is the income elasticity of demand for good Y in year 1? Is Y a normal or inferior good? Explain how you know whether it is a normal or inferior good. Price of Good X $5 $10 Income Elasticity of Demand: Blank 1 (Round your answer to TWO-decimal places; you MUST enter the decimal value even if it is a '0'- ie: 1.20 NOT 1.2.) Blank 1 Good Y is a Blank 2 (normal / inferior) good. Blank 2 Good Y is a normal/inferior good, because Blank 3. Blank 3 QD of Good X QD of Good Y 10 units 8 units 20 units 30 units Add your answer Add your answer Add your answer

Year 1 2 Income $10,000 $10,000 Using the above table and the Midpoint Method for Elasticity, suppose now that the income in year 1 increases from $10,000 to $20,000, and as a result, the quantity demanded for good y in year 1 changes from 20 units to 30 units. What is the income elasticity of demand for good Y in year 1? Is Y a normal or inferior good? Explain how you know whether it is a normal or inferior good. Price of Good X $5 $10 Income Elasticity of Demand: Blank 1 (Round your answer to TWO-decimal places; you MUST enter the decimal value even if it is a '0'- ie: 1.20 NOT 1.2.) Blank 1 Good Y is a Blank 2 (normal / inferior) good. Blank 2 Good Y is a normal/inferior good, because Blank 3. Blank 3 QD of Good X QD of Good Y 10 units 8 units 20 units 30 units Add your answer Add your answer Add your answer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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