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?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter1: Introducing The Economic Way Of Thinking

Section1.A: Applying Graphs To Economics

Problem 2SQP

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