Essentials of Economics (MindTap Course List)
7th Edition
ISBN: 9781285165950
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 4, Problem 4QR
To determine
Classifying inferior good and normal good.
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Harry's income declines and as a result, he buys more pumpkin juice. Is pumpkin juice an inferior or a normal good? What happens to Harry's demand curve for pumpkin juice?
Sohail’s income declines and as a result, he buys more pumpkin juice. Is pumpkinjuice an inferior or a normal good? What happens to Sohail’s demand curve forpumpkin juice?
Barron used to make $2,500 a month and eat sushi three times per month. Now he is making $3,500 a month and is eating sushi seven times per month. What is Barron’s income elasticity of demand for sushi? For Barron, is sushi 1) a normal good or an inferior good, and 2) a necessity or a luxury?
Chapter 4 Solutions
Essentials of Economics (MindTap Course List)
Ch. 4.1 - Prob. 1QQCh. 4.2 - Prob. 2QQCh. 4.3 - Prob. 3QQCh. 4.4 - Prob. 4QQCh. 4 - Prob. 1QRCh. 4 - Prob. 2QRCh. 4 - Prob. 3QRCh. 4 - Prob. 4QRCh. 4 - Prob. 5QRCh. 4 - Prob. 6QR
Ch. 4 - Prob. 7QRCh. 4 - Prob. 8QRCh. 4 - Prob. 9QRCh. 4 - Prob. 1QCMCCh. 4 - Prob. 2QCMCCh. 4 - Prob. 3QCMCCh. 4 - Prob. 4QCMCCh. 4 - Prob. 5QCMCCh. 4 - Prob. 6QCMCCh. 4 - Prob. 1PACh. 4 - Prob. 2PACh. 4 - Consider the market for minivans. For each of the...Ch. 4 - Prob. 4PACh. 4 - Prob. 5PACh. 4 - Prob. 6PACh. 4 - Prob. 7PACh. 4 - Prob. 8PACh. 4 - Prob. 9PACh. 4 - Prob. 10PACh. 4 - Prob. 11PA
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- Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?arrow_forwardSuppose when a person’s income increases, his or her demand for mac and cheese decreases. What is the relationship between mac and cheese and income? Mac and cheese are Substitutes Mac and cheese are a Normal good Mac and cheese are an Inferior good Mac and cheese are unaffected by changes in incomearrow_forwardWhat happens to consumption of a normal good when its price increases?arrow_forward
- James consumes two types of goods: fruit and clothing. Fruits cost him $ 2 per unit, clothing costs $ 25 per unit, and his income is $ 1,000. He always spends 40% of his income on fruit, regardless of the price of fruit and clothing, as well as his income. a. What is the cross-price elasticity of its demand for fruit relative to the price of clothing? b.What is the elasticity-income of its fruit demand? Detail your answers.arrow_forwardImagine your income increases and you find that you buy more coffee. What is true about your income elasticity of demand (Ei) and how you perceive coffee? Ei > 0 and you view coffee as an inferior good Ei > 0 and you view coffee as a normal good Ei < 0 and you view coffee as an inferior good Ei < 0 and you view coffee as a normal goodarrow_forwardAssume that the income elasticity of demand for hot dogs is - 1.25 and that the income elasticity of demand for lobster is 1.25. What will happen to each good's demand curve as income goes up?arrow_forward
- Nadia consumes two goods, food and clothing. The price of food is $2,the price of clothing is $5,and her income is $1,000. Nadia always spends 40 percent of her income on food regardless of the price of food, the price of clothing, or her income.What is her price elasticity of demand for food?arrow_forwardGive an example of a normal good. What will happen to the demand for normal goods if your income goes up?arrow_forwardQ: Sally gets a raise of 12%, and as a result, her demand for burgers decreases by 9%. What is the income elasticity of Sally’s demand for burgers? Are burgers a normal good, an inferior good, or neither for Sally?arrow_forward
- Consider the demand for tea. If(a) the price of a substitute good (for example, coffee) increases(b) the price of a complement good (for example, sugar) increases,what will happen to the demand for tea? Why or why not? Explain and illustrate your answer with a graph.arrow_forwardHow does a consumer’s optimal choice of goods change if all prices and the consumer’s income double?arrow_forwardAfter Peter’s income increased from $100 to $200, his purchases of tuna fish decreased from 5 cans to 3 cans per week. Calculate Peter’s income elasticity of demand? What type of a good is tuna fish?arrow_forward
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