Maria has decided always to spend one-third of her income on clothing. What is her income elasticity of clothing demand? What is her price elasticity of clothing demand? If Maria’s tastes change and she decides to spend only one-fourth of her income on clothing, how does her demand curve change? What is her income elasticity and price elasticity now?

Principles of Microeconomics
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Chapter5: Elastic And Its Application
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Problem 7PA: Maria has decided always to spend one third of her income on clothing. a. What is her income...
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 Maria has decided always to spend one-third of her income on clothing.

  1. What is her income elasticity of clothing demand?
  2. What is her price elasticity of clothing demand?
  3. If Maria’s tastes change and she decides to spend only one-fourth of her income on clothing, how does her demand curve change? What is her income elasticity and price elasticity now?
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