Calculate the income elasticity of demand

Reference no: EM131480204

Question: From the information in the following table, Income Quantity Demanded $10,000 50 $20,000 60 $30,000 70 $40,000 80 $50,000 90

a. Calculate the income elasticity of demand for this good if income increases from $10,000 to $20,000, (2 pts.)

b. Calculate the income elasticity of demand for this good if income increases from $40,000 to $50,000. (2 pts.)

c. Is this a normal or an inferior good? How can you tell? (2 pt.)

d. Does the proportion of household income spent on this good increase or decrease as income increases? (2 pts.)

e. Is this good considered an economic luxury, an economic necessity, or neither? Why? please may i have the solution.

Reference no: EM131480204

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