You have data on Timon's quantity demanded for Bud Light beer and their income. According to this data when Timon's income rises by 6% the associated change in their quantity demanded for Bud Light is 14%. You don't know if it is an increase or decrease in quantity demanded. From past research you know that Bud Light is an inferior good for Timon. Use this information to calculate Timon's income elasticity of demand. Remember, for some elasticities, we take the absolute value. For others, we do not. Include a negative sign if needed.

You have data on Timon's quantity demanded for Bud Light beer and their income. According to this data when Timon's income rises by 6% the associated change in their quantity demanded for Bud Light is 14%. You don't know if it is an increase or decrease in quantity demanded. From past research you know that Bud Light is an inferior good for Timon. Use this information to calculate Timon's income elasticity of demand. Remember, for some elasticities, we take the absolute value. For others, we do not. Include a negative sign if needed.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Stuck on this question for hours. Question in image. Thanks :)

You have data on Timon's quantity demanded for Bud Light beer and their income. According
to this data when Timon's income rises by 6% the associated change in their quantity
demanded for Bud Light is 14%. You don't know if it is an increase or decrease in quantity
demanded. From past research you know that Bud Light is an inferior good for Timon. Use this
information to calculate Timon's income elasticity of demand.
Remember, for some elasticities, we take the absolute value. For others, we do not. Include a
negative sign if needed.
wered
0.84
Answer
-2.33 margin of error +/- 0.1
If a good is inferior for a consumer, as income rise, the quantity demanded decreases.
%AQ
As income and quantity move in opposite directions, elasticity is negative. e =
%AI

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