Suppose that your demand schedule for motor vehicles is as follows: Price Quantity Demanded (income = $15,000) Quantity Demanded (income = $24000) 640 8500 7400 920 7150 6900 1120 6450 5830 1300 5895 5385 1430 4950 4730 i. Calculate your price elasticity of demand as the price of motor vehicles increases from $920 to $1300 when income is $15,000. Is the good elastic or inelastic? ii. Calculate your income elasticity of demand as your income increases from $15,000 to $24,000 if the price moves from $640 to $1,120. What does the value tell you about the good?
Suppose that your demand schedule for motor vehicles is as follows: Price Quantity Demanded (income = $15,000) Quantity Demanded (income = $24000) 640 8500 7400 920 7150 6900 1120 6450 5830 1300 5895 5385 1430 4950 4730 i. Calculate your price elasticity of demand as the price of motor vehicles increases from $920 to $1300 when income is $15,000. Is the good elastic or inelastic? ii. Calculate your income elasticity of demand as your income increases from $15,000 to $24,000 if the price moves from $640 to $1,120. What does the value tell you about the good?
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter19: Elasticity
Section19.1: Elasticity: Part 1
Problem 1ST: On Tuesday, the price and quantity demanded are 7 and 120 units, respectively. Ten days later, the...
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Suppose that your
Price Quantity Demanded
(income = $15,000)
Quantity Demanded
(income = $24000)
640 8500 7400
920 7150 6900
1120 6450 5830
1300 5895 5385
1430 4950 4730
i. Calculate your price elasticity of demand as the price of motor vehicles
increases from $920 to $1300 when income is $15,000. Is the good elastic
or inelastic?
ii. Calculate your income elasticity of demand as your income increases
from $15,000 to $24,000 if the price moves from $640 to $1,120. What does
the value tell you about the good?
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