If demand falls by 5% due to an increase in income by 20%, calculate the income elasticity of demand. What type of commodity is this?

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter6: Consumer Choices
Section: Chapter Questions
Problem 15CTQ: Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the...
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. If demand falls by 5% due to an increase
in income by 20%, calculate the income
elasticity of demand. What type of
commodity is this?
Transcribed Image Text:. If demand falls by 5% due to an increase in income by 20%, calculate the income elasticity of demand. What type of commodity is this?
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