What is the income elasticity of gasoline

Assignment Help Business Economics

Reference no: EM131001936

Suppose that when income increases by 10%, the quantity demanded of gasoline increases by 3%.

a. What is the income elasticity of gasoline?

b. Based on your answer, is gasoline a normal or inferior good? Is it a necessity or a luxury?

Reference no: EM131001936

Questions Cloud

Determine the free trade equilibrium : Suppose that workers involved in manufacturing are paid less than all other workers in the economy. What would be the effect on the real income distributionwithin the economy if there were a substantial tariff levied on manufactured goods?

Principal place of business in michigan : Pet Food Company Inc., is incorporated in Delaware, with its principal place of business in Michigan. Alice asks you whether she can sue in federal court. What would you tell her and why?

What is cross-price elasticity of socks with respect to shoe : Suppose that when the price of shoes increases by 5%, the quantity demanded for socks decreases by 10% and the quantity demanded of sandals increases by 4%. What is the cross-price elasticity of socks with respect to shoes? Are shoes and socks relate..

Methods for reconciling an employer : List and describe the methods for reconciling an employer's Revenu Québec (RQ) account.

What is the income elasticity of gasoline : Suppose that when income increases by 10%, the quantity demanded of gasoline increases by 3%. What is the income elasticity of gasoline? Based on your answer, is gasoline a normal or inferior good? Is it a necessity or a luxury?

Demand for ethanol has increased the price of sugarcane : Suppose that rising demand for ethanol has increased the price of sugarcane, and that land devoted to growing sugarcane is also commonly used to grow rice. What impact would an increase in the price of sugarcane have on the supply of rice? Suppose th..

Using supply and demand curve diagrams : Please provide answers to the following using supply and demand curve diagrams. What is the effect of a decrease in the price of rubber on the new car market? What effect might cause the price of milk to fall and the quantity to fall also?

Design and layout of the home page : Visit the websites of five major corporations or organizations. design and layout of the home page, ability to easily navigate the site and find information of interest to you

Result increases infrastructure spending : Assume the U.S. is a SMALL OPEN economy and the European Union is a LARGE OPEN economy. In addition, suppose the EU cuts tax rates and increases infrastructure spending. Assume the U.S. is a small open economy and has balanced trade. Suppose Congress..

User Account

All Pages