option choicespositive inferior goodpositive normal goodnegative inferior goodnegative normal good Suppose that a 6% increase in income results in an 8% increase inthe quantity demanded of a good. Then the income elasticity ofdemand for the good is

Elasticity in Economics:Elasticity is used to signify the sensitivity of the quantity demanded or…

Answered: the quantity demanded of a good. Then…

Business

Economics

the quantity demanded of a good. Then the income elasticity of demand for the good is

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Elasticity

Section: Chapter Questions

Problem 3WNG: The quantity demanded of good X rises from 130 to 145units as income rises from 2,000 to 2,500 a...

See similar textbooks

Related questions

Q: Suppose now that the government decides to increase the number of quotas available to 72 units, but…

A: Given:Qd=180-2PQs=-15+PIt is known that, at equilibriumIf the price is $72:The graph is:

Q: A major advantage of the corporation is a. preferential treatment by state governments. b. limited…

A: Limited Liability:Limited liability is a legal concept that protects the personal assets of…

Q: On the following graph, use the green point (triangle symbol) to plot the weekly total revenue when…

A: Elasticity refers to the percentage change in quantity demanded with respect to the percentage…

Q: Suppose that when you pick apples for 3 hours, you pick 8 baskets of apples. you pick apples for an…

A: Marginal benefit is the additional benefit that a consumer receives from consuming one more unit of…

Q: nstructions: Use the tool provided (CS) to draw the consumer surplus. Click on the graph to place…

A: Consumer surplus is an economic concept that represents the difference between the maximum price a…

Q: Refer to Figure 12-1. Holding everything else constant, a decrease in households' expectations of…

A: Aggregate demand (AD) is the total demand for all goods and services within an economy at a given…

Q: Figure 4-2 Price (S) P₂ 0₁ Supply Quantity Refer to Figure 4-2. What area represents the increase in…

A: Economics is a social science that studies how individuals, businesses, governments, and societies…

Q: find the trade-off rate between good X and good Y at Qx= 7 and Qy=17

A: The marginal rate of substitution is also the trade off rate. Marginal rate of substitution is the…

Q: Consider a company that produces Good A and Good B. The equation of the PPF is 9x²+3y² 18,900, where…

A: Given: Equation of the production possibilities frontier (PPF): Initially: The new technology allows…

Q: (Figure 4.13) What caused the budget constraint to rotate? A. an increase in the price of good Y B.…

A: It can be described as a concept that shows the graphical representation of the different…

Q: A debt of $5,000 due in five years from now and $ 5,000 due in ten years from now is to be repaid…

A: Compound interest is a concept in finance that refers to the accrual of interest on both the initial…

Q: Show graphically the effect of a rise in expected inflation on interest rates in the bond market.

A: To visualize the effect of a rise in expected inflation on interest rates in the bond market…

Q: A small town has two bakeries, Acme and Fat Apple. Acme's marginal cost to make a loaf of bread is…

A: Acme's marginal cost to make a loaf of bread is $1 and Fat Apple's marginal cost is $2Acme's demand…

Q: In the short run, before policymakers realize that potential output has fallen, O inflation will…

A: Since the student has posted multiple questions, the expert is required to solve only the first…

Q: Economic power is diffused throughout an economy when Multiple Choice O the government decides what…

A: Economic power diffusion refers to the distribution of economic influence among many buyers and…

Q: ommunication Equipment Two sectors of the U.S. economy are (1) audio, video, and communication…

A: An input-output matrix, also known as an input-output table or IO table, is a structured…

Q: The price of a pie is now $11. At a price of $11, are pies are sold in the market. Each producer…

A: Given the price of 11, we derive the total cost and total revenue to derive optimal selling…

Q: Which of the following is NOT held constant while moving along a supply curve? O expected future…

A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…

Q: At point A on the demand curve shown below, how will a 1 percent increase in the price of the…

A: Price elasticity of demand measures the responsiveness of change in quantity demand to change in…

Q: a. What is the value of AC at economic capacity in each of the three plants? Plant 1: Plant 2: Plant…

A: a. What is the value of AC at economic capacity in each of the three plants?Economic capacity refers…

Q: Consider the graph below, illustrating a positive externality. Price 569 $57 $45 $33 $21 28 36…

A: Externalities occur when there is an indirect impact on a party that is not directly related to the…

Q: What should be the time to maturity, IN YEARS, of the bond that has 7.7% of coupon rate and has the…

A: To calculate the time to maturity (in years) of a bond, you can use the bond pricing formula and…

Q: Doug William, the owner of a corner store, estimates that the supply and demand for a specialized…

Q: Packaging is probably the cheapest, quickest and easiest way to adapt a product to make it more…

A: Packaging is one of the ways to adapt a product to make it more suitable for foreign markets.…

Q: Kenji, Lucia, and Stasia are the only inhabitants of the small island of Tock. Unfortunately, the…

A: International trade:International trade means buying and selling goods and services from outside the…

Q: 13. Firms in Competitive Markets The market for fertilizer is perfectly competitive. Firms in the…

A: The perfectly competitive market is a market type which is characterized by a large number of buyers…

Q: If the real interest rate is currently 12 percent and real GDP is $150 billion, what will be the…

A: Planned investment refers to the level of investment spending that businesses or firms intend to…

Q: Assume quantities need not be integers. A monopolist incurs marginal cost equals to MC=Q per unit…

A: Monopolist marginal cost function: Monopolist does not have fixed cost of production. Therefore FC…

Q: Please match: as price drops, price drops, revenue will... Ed>1 Ed<1 Ed=1 A grow B stay same C) drop

A: Elasticity refers to the responsiveness of changes in price leads to change in demand.For example…

Q: Can a destination country experience both positive and negative selection in immigration at the same…

A: In this section, we will clarify the concept of positive and negative selection in immigration and…

Q: The following table shows the average nominal interest rates on six-month Treasury bills between…

A: The real interest rate is a crucial concept in economics and finance. It shows the nominal interest…

Q: Each of the following has contributed to the rapid growth of trade among nations EXCEPT A-The growth…

A: The import and export of goods and services help in the growth of economic situations of the nations…

Q: A firm has the following total-cost and demand functions: C=Q³-7Q² +111Q+50 Q = 100 - P (a) Does the…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: a) all firms will produce an identical product b) entry or exit will shift the demand curve until…

A: A market structure known as monopolistic competition incorporates aspects of both monopolies and…

Q: The division of labor is the separation of the work required to produce a product into a number of…

A: Labor alludes to the human exertion utilized in the production of goods and services. It includes…

Q: Suppose the government has elected not to impose regulations on the industry, and so the firm faces…

A: A monopoly market is a market structure in which a single firm or entity has exclusive control over…

Q: Price 20 18 16 14 12 10 $1.200 Х $2.000 1000 Quantity Assume that the market in the graph above is…

A: Tax revenue is the money that government gets as tax receipts by taxing a good.

Q: Given a demand curve of P = 1200 - 40Qd and supply of P = 200 + 10Qs and a binding price control at…

A: Demand equation: Supply equation: Binding price control is at $291.This price control can be a price…

Q: How does an increase in the price level affect the quantity of real GDP supplied in the long run?…

A: Gross Domestic Product refers to the final value of all goods and services produced in a territory…

Q: 12. Use the Foreign Exchange market for British pounds to answer the following. Suppose that the…

A: Exchange rate refers to the rate at which the currency of one nation can be exchanged with the…

Q: The accompanying table gives information on the quantity of lemonade demanded on sunny and overcast…

A: A straight line is usually drawn using a price-quantity combination (here), which shows a negative…

Q: Perfectly competitive industries have free entry and exit in the long run. When will firms decide to…

A: A perfectly competitive market is a type of market structure in which there are many buyers and…

Q: There are three demanders and two suppliers in the market for miniature musical daiquiri umbrellas.…

A: Market demand is the horizontal summation of the individual demand at each price level. At each…

Q: 1a. Draw supply curve for auto tires. Label axes. b. Show effect of. Decline in number of tire…

A: Supply curve is the graphical representation of the supply of a good or services that depicts tha…

Q: A large consumer goods company ran a television advertisement for one of its soap products. On the…

A: The measure which depicts how likely an event would tend to either happen or not happen is known as…

Q: M 40k 30 20 10 12 10 200 100 59 10 O250 Q=100 Isoquant 15 As a production process requires labor L…

A: A production function in economics is a mathematical equation or relationship that shows how inputs…

Q: 2. Draw a diagram depicting a firm that is making a profit in a monopolistically competitive market.…

A: The monopolistic competitive market is the market where the sellers sell products at different…

Q: Using the chain weighting method to calculate real GDP and its components, which of the following…

A: Real GDP is the actual output produced by an economy in one year.

Q: A surplus would exist The aggregate quantit supplied. The average price leve The equilibrium price

A: The aggregate demand curve depicts the total quantity of goods and services demanded at each price…

Q: For each of the prices listed in the following table, determine the quantity of blueberries…

A: Price ceiling refers to the mechanism by which the price for a good is prevented from rising to a…

Question

option choices

positive inferior good

positive normal good

negative inferior good

negative normal good

Suppose that a 6% increase in income results in an 8% increase in
the quantity demanded of a good. Then the income elasticity of
demand for the good is

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define elasticity

VIEW

Step 2: Choose correct option

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

The price elasticity of demand for personal computers is estimated to be 2.2. If the price of personal computers declines by 20 percent, what will be the expected percentage increase in the quantity of computers sold?
(Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of demand measures, for a given price, the __________ in quantity demanded divided by the __________ income from which it resulted. b. If a decrease in the price of one good causes a decrease in demand for another good, the two goods are __________. c. If the value of the cross-price elasticity of demand between two goods is approximately zero, they are considered __________.
Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy?
Using the following equation for the demand for a good or service, calculate the price elasticity of demand (using the point form), cross-price elasticity with good x and income elasticity. Q=82P+0.10I+Px Q is quantity demanded, P is the product price. P1 is the price of a related good, and I is income. Assume that P= $10, I = 100, and Px = 20.
The quantity demanded of good X rises from 130 to 145units as income rises from 2,000 to 2,500 a month. What is the income elasticity of demand for good X?
What does a price elasticity of demand of 0.39 mean?
A life-saving medicine without any close substitutes will tend to have a. a small elasticity of demand. b. a large elasticity of demand. c. a small elasticity of supply. d. a large elasticity of supply.