When Alex's income was $6,000, he bought 2 bagels and 12 donuts a month. Now his income is $8,000 and he buys 6 bagels and 6 donuts a month. Calculate Alex's income elasticity of demand for bagels and donuts. >>> Answer to 2 decimal places. >>> If your answer is negative, include a minus sign. If your answer is positive, do not include a plus sign. Alex's income elasticity of demand for bagels is 2.33

When Alex's income was $6,000, he bought 2 bagels and 12 donuts a month. Now his income is $8,000 and he buys 6 bagels and 6 donuts a month. Calculate Alex's income elasticity of demand for bagels and donuts. >>> Answer to 2 decimal places. >>> If your answer is negative, include a minus sign. If your answer is positive, do not include a plus sign. Alex's income elasticity of demand for bagels is 2.33

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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Plot the price and quantity data given in the demand schedule of exercise 1. Put price on the vertical axis and quantity on the horizontal axis. Indicate the price elasticity value at each quantity demanded. Explain why the elasticity value gets smaller as you move down the demand curve.
Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy?
Isabella always spends $50 on red roses each month and simply adjusts the quantity she purchases as the price changes. What can you say about Isabella's elasticity of demand for roses?
Using the following equation for the demand for a good or service, calculate the price elasticity of demand (using the point form), cross-price elasticity with good x and income elasticity. Q=82P+0.10I+Px Q is quantity demanded, P is the product price. P1 is the price of a related good, and I is income. Assume that P= $10, I = 100, and Px = 20.
(Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of demand measures, for a given price, the __________ in quantity demanded divided by the __________ income from which it resulted. b. If a decrease in the price of one good causes a decrease in demand for another good, the two goods are __________. c. If the value of the cross-price elasticity of demand between two goods is approximately zero, they are considered __________.
What does a price elasticity of demand of 0.39 mean?
Estimates presented in Exhibit 5 show that Android users have a higher price elasticity of demand for apps in the Google Play Store than do iPhone users in the Apple App Store. Why might Android users tend to be more sensitive to app prices than iPhone users? What categories or types of apps (for example, games/social media) do you think have the highest price elasticities?