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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

Maria has decided always to spend one third of her income on clothing.

  1. a. What is her income elasticity of clothing demand?
  2. b. What is her price elasticity of clothing demand?
  3. c. It 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?

Subpart (a):

To determine
Calculating the price and income elasticity of demand.

Explanation

The person is spending one third of income for buying cloth...

Subpart (b):

To determine
Calculating the price and income elasticity of demand.

Subpart (c):

To determine
Calculating the price and income elasticity of demand.

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