You have data on Meena's quantity demanded for craft beer and their income. According to this data when Meena's income falls by 7% the associated change in their quantity demanded for beer is 11%. You don't know if it is an increase or decrease in quantity demanded. From past research you know that craft beer is a normal good for Meena. Use this information to calculate Meena's income elasticity of demand.

You have data on Meena's quantity demanded for craft beer and their income. According to this data when Meena's income falls by 7% the associated change in their quantity demanded for beer is 11%. You don't know if it is an increase or decrease in quantity demanded. From past research you know that craft beer is a normal good for Meena. Use this information to calculate Meena's income elasticity of demand.

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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