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?

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

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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Maria has decided always to spend one third of her income on clothing. a. What is her income elasticity of clothing demand? b. What is her price elasticity of clothing demand? c. It Marias 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?
Nadia consumes two goods, food and clothing. The price of food is $2,the price of clothing is $5,and her income is $1,000. Nadia always spends 40 percent of her income on food regardless of the price of food, the price of clothing, or her income.What is her price elasticity of demand for food?
Nadia consumes two goods, food and clothing. The price of food is $2, the price of clothing is $5, and her income is $1,000. She always spends 40% of her income on food regardless of the price of food, clothing, or her income. What is her price elasticity of demand for food? What is her cross-price elasticity of demand for food with respect to clothing? What is her income elasticity of demand for food?
We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category-explain your reasoning for each categorization.
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Jonathan's income falls by 15%. He decides to cut down his purchases of high-end restaurant meals by 20%. His income elasticity of demand for high-end restaurant meals is and meals at high-end restaurants are a good for Jonathan.
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