Calculate the income-elasticity of demand for toilet paper

Assignment Help Microeconomics
Reference no: EM132175386

Question: Suppose that when the average family income rises from $30,000 per year to $40,000 per year, the average family's purchases of toilet paper rise from 100 rolls to 105 rolls per year.

a. Calculate the income-elasticity of demand for toilet paper.

b. Is toilet paper a normal or an inferior good?

c. Is the demand for toilet paper income-elastic or income-inelastic?

Reference no: EM132175386

Questions Cloud

Compare sculptures of ancient india and greece : Select any two (2) of these rulers: Ramses II, Shihuangdi, Constantine, Ashoka, Pericles, or Charlemagne. Select rulers from different cultures.
Examine whether quantity supplied will increase or decrease : In each of the following instances, determine whether quantity supplied will increase or decrease, and by how much.
What is the cross-price elasticity of demand : The quantity of jelly purchased rises from 15 million jars to 20 million jars. What is the cross-price elasticity of demand between peanut butter and jelly?
Capital budgeting techniques to investment decision making : FINA6000 Managing Finance - Case Analysis – Analyse the cost of capital and explore its link to the capital structure of an organisation
Calculate the income-elasticity of demand for toilet paper : Suppose that when the average family income rises from $30,000 per year to $40,000 per year, the average family's purchases of toilet paper rise from 100 rolls.
Determine whether the good is normal or inferior : In each of the following instances, determine whether the good is normal or inferior, and whether it is income-elastic or income-inelastic.
Describe a situation from your own experience : Describe a situation from your own experience in which you are time inconsistent. What have you done (or might you do) to accomplish the goals.
Does the inclination make sense : You've already paid to get into an all-you-can-eat buffet and have enjoyed several plates of food. You're not really hungry anymore but feel you ought.
Are the rich more unethical than the poor : Upper-class drivers were the most likely to cut off other vehicles at the intersection, even when controlling for time of day, driver's perceived sex and age.

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd