Assignment on income elasticity

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Reference no: EM133063236

Income Elasticity

Problem 1

Calculate the arc entrance elasticity in the following situation. Use the method of mathematicians.

Entry

Amount

$200

40

$300

50

Based on the above result, the consumer's response regarding the product can be considered a normal or inferior good.

Problem 2

Calculate the arc entrance elasticity in the following situation. Use the method of the mathematicians.

Entry

Amount

$500

80

$600

60

Based on the above result, the consumer's response regarding the product can be considered a normal or inferior good.

Problem 3

Calculate the point income elasticity for a consumer that reflects the following behavior.

Entry

Amount

$300

1000

$450

800

$600

600

What is the consumer response at each given income level?

Problem 4

Calculate the point income elasticity for the following income and determine the buyer's response

Q = -5 I + 2000

I= 200

Q = 12I + 100

I= 100

Reference no: EM133063236

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