where income is measured in thousands of dollars. If p = 5, and Y = %3D a. What is the income elasticity? Interpret and explain your result. What type of good is this? b. If the equation is then re-estimated using just dollars instead of thousands of dollars, what will be the effect on the coefficient for Y and the income elasticity? Explain your result. c. How would the income elasticity change if the price were increased to $9.30? Interpret

where income is measured in thousands of dollars. If p = 5, and Y = %3D a. What is the income elasticity? Interpret and explain your result. What type of good is this? b. If the equation is then re-estimated using just dollars instead of thousands of dollars, what will be the effect on the coefficient for Y and the income elasticity? Explain your result. c. How would the income elasticity change if the price were increased to $9.30? Interpret

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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