The table gives the income elasticities of demand for various products. Use it to answer the following questions a. Which product’s demand reacts the most when income changes? Product Income elasticity Haircuts 1.36 Ramen noodles −0.76 Tobacco 0.86 Airline travel 5.82 b. Which product’s demand increases during a recession when incomes fall?

The table gives the income elasticities of demand for various products. Use it to answer the following questions a. Which product’s demand reacts the most when income changes? Product Income elasticity Haircuts 1.36 Ramen noodles −0.76 Tobacco 0.86 Airline travel 5.82 b. Which product’s demand increases during a recession when incomes fall?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 8E

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