Nadia consumes two goods, food and clothing. The price of food is $2, the price of clothing is $5, and her income is $1,000. She always spends 40% of her income on food regardless of the price of food, clothing, or her income.What is her price elasticity of demand for food?What is her cross-price elasticity of demand for food with respect to clothing?What is her income elasticity of demand for food?

Elasticity of demand measures the responsiveness of quantity demanded with respect to change in…

Answered: Nadia consumes two goods, food and…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 7PA: Maria has decided always to spend one third of her income on clothing. a. What is her income...

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Nadia consumes two goods, food and clothing. The price of food is $2, the price of clothing is $5, and her income is $1,000. She always spends 40% of her income on food regardless of the price of food, clothing, or her income.

1. What is her price elasticity of demand for food?
2. What is her cross-price elasticity of demand for food with respect to clothing?
3. What is her income elasticity of demand for food?

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