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Vlad and Melita both earn $400 per week. Suppose that Vlad gets a raise of $50 per week and Melita gets a raise of $60 per week.
Questions
1. Vlad's purchases of peaches increase from 10 per week to 15 per week. Calculate his income elasticity for peaches.
2. Melita's purchases of peaches change from 5 per week to 2 per week. Calculate her income elasticity for peaches.
3. What is the difference in attitude toward peaches for both Melita and Vlad?
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