Naomi consume two goods, r and y. She spends 25% of her income on x and 75% ofher income on y. If the income elasticity of z is 1.6, what is the income elasticity of y?(a) €,1 = 0.4(b) €y, I = 0.8(c) €y.1 = 1.6(d) Not enough information

The term "income elasticity of demand" describes how responsive a given good's quantity demand is to…

Naomi consume two goods, z and y. She spends 25% of her income on x and 75% of her income on y. If the income elasticity of a is 1.6, what is the income elasticity of y? (a) €.1 = 0.4 (b) €.1=0.8 (c) €.1 = 1.6 (d) Not enough information

Naomi consume two goods, z and y. She spends 25% of her income on x and 75% of her income on y. If the income elasticity of a is 1.6, what is the income elasticity of y? (a) €.1 = 0.4 (b) €.1=0.8 (c) €.1 = 1.6 (d) Not enough information

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...

See similar textbooks

Related questions

Q: Private property rights do not conflict with human rights. They are human rights. Private property…

A: According to Armen Alchian, a property right is "the right to determine the use of a resource,…

Q: D Question 24 Income inequality is indicated by a Lorenz curve that: approaches the vertical axis.…

A: Income inequality shows the differences in income distribution among households of a society.

Q: An integrated, combined cycle power plant produces 280 MW of electricity by gasifying coal. The…

A: The present value of a project or investment refers to its value at the time of investment in…

Q: Q1. Where on the business cycle graph displayed in the video was the US economy most likely at in…

A: Contraction of real GDP refers to the situation where the absolute value of real GDP declines.…

Q: Describe how changes in expected inflation impact an economy in the wake of a temporary negative…

A: Temporary negative supply shocks raise expansion and joblessness rates, requiring a contractionary…

Q: What happens when a bank borrows from the Fed’s “discount window”

A: The discount window is a lending facility provided by the Fed to banks and other depository…

Q: Explain why used fridges offered for sale are different, on average, from used fridges not offered…

A: Introduction Product is a good or service that is offered for sale on the market. Sale refers to the…

Q: PRICE LEVEL OOO W LRAS x Y N AD. QUANTITY OF OUTPUT AD₁ AD₂ SRAS Refer to Figure 33-5. Suppose the…

A: The level of production produced by enterprises and the price level over the long term are related…

Q: many developing nations, young women have lower enrollment rates in secondary school than do young…

A: People can develop their skills through education, which correlates to increased income since it…

Q: Consider the following statement and describe its accuracy: "A country's male labour force…

A: In this case, we have to discuss the labor force participation rate and labor force participation…

Q: Which federal agency is the source of consumer price index (CPI) data? O The U.S. Bureau of Labor…

A: Consumer price index (CPI) measures the change in the price of a market basket bought by consumer…

Q: Which of the following does the unemployment rate not tell us? A. Percent of the labor force…

A: People who are actively looking for a job and are able to work are considered unemployed.

Q: As a result of a fare war, the price of a luxury cruise falls 20%, does luxury cruise companies…

A: Price elasticity estimates the responsiveness of the quantity demanded or supplied of a product to a…

Q: PRICE (Dollars per ton) 865 Domestic Demand 830 795 760 725 690 655 620 585 550 515 0 + I 40 80…

A: Demand curve is the downward sloping curve. Supply curve is the upward sloping curve. Equilibrium…

Q: The following graph gives the labor market for laboratory aides in the imaginary country of…

A: Demand-supply equilibrium: The demand function reflects an individual’s willingness to pay for each…

Q: If Fig. A represents the market for unskilled labor, what will be the impact of the imposition of…

A: The minimum wage, as the name suggests, is the minimum remuneration that an employer is legally…

Q: Regression through the origin Occasionally, one wants to impose that the predicted is zero when all…

A: Regression model is a statistical tool used to investigate and model the relationship between a…

Q: A new machine will cost $200,000. Its maximum useful life is 8 years. The expected market value (MV)…

A: In the header row of the pertinent table, the derivation of computations in each required column has…

Q: Macroeconomics focuses on: A.The economy as a whole B.Individual decisions C.Wages…

A: Macroeconomics is the field of economics wherein we studies the performance of macroeconomic…

Q: What principal will amount to $2500 if invested at 5% interest compounded semiannually for 7.5…

A: Compounding is the process of increasing a loan or investment's principal over time by adding…

Q: Analyze the impact of a decrease in tariffs (taxes) on imported flat screen televisions in the…

A: Imports and Exports: In the modern economy, firms often produce products and services which can be…

Q: How does a business owner applying the concept of marginal costs decide how much to produce? For…

A: The marginal cost of production helps to determine the change in the cost of an item resulting from…

Q: The island of Sushia produces fish, rice and saki. Here are the data on prices and quantities of the…

A: Gross domestic product (GDP) measures the market value of final goods and services produced by a…

Q: Proponents of comparable worth justifies it on the ground that: 1. interaction of demand and supply…

A: Comparable worth is an economic concept that suggests that jobs with similar levels of skill,…

Q: Explain the reasons behind economic expansion in the United States.

A: GDP: GDP is the sum of the value of all end commodities produced within the country in a year. The…

Q: n Delhi, a haircut costs 135 rupees (INR). The same haircut costs 15 Singapore dollars (SGD) in…

A: Exchange rate is the rate of exchange the domestic currency with foreign currency , every currency…

Q: 3. Fred Jones a new employee at Stibo's Frozen Foods estimates that the price elasticity of demand…

A: Reason to be suspicious of Fred's estimate: Fred's estimate of the price elasticity of demand for…

Q: Calculate the surplus caused by the price floor.

A: A price floor is the government-imposed minimum price set for a product. A price floor is binding…

Q: Give me one 2 threats/opportunity of Jollibee corporation interms gross domestic products, with…

A: Jollibee Corporation, a multinational fast-food company, faces both threats and opportunities in…

Q: A monopoly is considering selling several units of a homogeneous product as a single package.…

A: A monopoly is selling homogenous products as a single package. The optimal number of units to put…

Q: Consider the following example, which follows the analytical framework of Goldin and Katz (2008). a)…

A: Given information There are 2 inputs: Capital and labor wage rate=$20 Rental rate of the capital=$10…

Q: The Sun River beverage company is a regional producer of teas, exotic juices, and energy drinks.…

A: Given : Demand per week - 2140 units Time taken for production - Hours * Days * Mins = 5 hours * 5…

Q: What are 4 examples of how non-rational human behavior can change an economic outcome?

A: Introduction Non-rational human behavior is behavior that is not based on logical or rational…

Q: Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land,…

A: Profit is determined by subtracting costs from sales. The opportunity cost is also subtracted from…

Q: Outline four (4) the ways in which international business differs from domestic business. Support…

A: Introduction Trade is the exchange of goods, services, or both between two or more countries. It is…

Q: Suppose the median household earned $9,243 in 1976 and $52,765 in 2016. During that time, also…

A: CPI stands for Consumer Price Index, which is a measure of the average change over time in the…

Q: T/F/U. The Solow Model says that economic growth is a function of two things: capital and ideas.

A: The Neoclassical Growth Theory is an economic model of growth that describes how a steady economic…

Q: provide an assessment of the major requirements of the municipal budget and reporting regulation

A: Local administrations are an important layer in India's three-tiered governmental structure. In…

Q: 5. The price of trade Suppose that Croatia and Liechtenstein both produce ale and liquor. Croatia's…

A: Comparative advantage is the ability to produce goods and services at a lower opportunity cost than…

Q: Draw a standard long-run average cost curve. Identify on the graph and define economies of scale (or…

A: The long-run average cost (LRAC) curve is a graphical representation of the average cost per unit of…

Q: Suppose the relationship between Y and X is given by: Y = 3.1415 + 6X + error By how much does…

A: In economics, the expected value refers to the anticipated value of a random variable. It represents…

Q: Alternative 1 2 3 4 5 If the alternatives are independent and the MARR is 12% per year, the one(s)…

A: Internal rate of return refers to the rate at which the discounted present value of the future cash…

Q: The following are historical demand data: YEAR 2 years ago last year SEASON Spring Summer Fall…

A: I have calculated this problem using excel. I have attached a screenshot of my calculation in excel…

Q: a) What is the Nash equilibrium in this game?

A: The nash equilibrium is the pair of strategies from which none of the players in the game want to…

Q: Ripple effects occur throughout the economy when determine the effects of this increase, the , which…

A: According to the multiplier effect, an increase in revenue is finally met by a correspondingly…

Q: Communities are frequently concerned about whether or not police are vigilant in carrying out their…

A: Communities have experimented with incentive compensation for police, such as paying officers based…

Q: Suppose five people have houses on the same small lane. They all individually benefit from regular…

A: From given We show that find how much maintenance the current person is buying, we need to find the…

Q: First, explain the concept of risk-return trade off. How do you define return? How do you define…

A: Return refers to the profit or earnings an investor makes on their investment. It can be expressed…

Q: Calculate Iyana's marginal revenue and marginal cost for the first seven cardigans they produce, and…

A: In the case of a perfectly competitive market structure for cardigans with a market P = $ 20 per…

Q: Who benefited from this tariff? Choose one or more: A. Mexican sugar producers B. non-Mexican…

A: As a sugar is a staple good and is not differentiable on the attribute that whether it is imported…

Question

Naomi consume two goods, r and y. She spends 25% of her income on x and 75% of
her income on y. If the income elasticity of z is 1.6, what is the income elasticity of y?
(a) €,1 = 0.4
(b) €y, I = 0.8
(c) €y.1 = 1.6
(d) Not enough information

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is the formula for elasticity of savings with respect to interest rates?
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?
Suppose = 10,000-2P + 3P -4.5M, where P = $100, P = $50, and M (income) = $2,000. (a) What is the own x x y price elasticity of demand? Please show your calculations. (b) What is the cross price elasticity between good x and good Y? Please show your calculations. (c) What is the income elasticity of demand? Please show your calculations. Hint: For this question please look at the section "Obtaining Elasticities from Demand Functions" in Chapter 3 on pages 89 - 90 of the textbook 2. Suppose Qd=10,000-2 Px +3 Px-4.5M, where Px $100, Px = $50, and M (income) = $2,000. (a) What is the own price elasticity of demand? Please show your calculations. (b) What is the cross price elasticity between good X and good Y? Please show your calculations. (c) What is the income elasticity of demand? Please show your calculations. Hint: For this question please look at the section "Obtaining Elasticities from Demand Functions" in Chapter 3 on pages 89-90 of the textbook
Suppose that when income decreases by 4%, the quantity of margarine demanded rises by 1%. Knowingthis, the income elasticity (EI) for margarine is(A) EI = .25(B) EI = -1/4(C) EI = -4(D) EI = -3
7) If the income elasticity of demand for books is 1,5, a 10 % increase in the income of consumers will cause a __ and books are _a) 15% increase in the demand for books, normal goodsb) 15 % decrease in the demand for books, superior goodsc) 15% increase in the demand for books, inferior goodsb) 15 % decrease in the demand for books, inferior good[14:16]If the elasticity of demand for umbrellas is -1.6 and the price of umbrellas increases by 10 %, the expenditures on umbrellas willa) decrease by 6 %b) decrease b 10 %c) increase by 10 %d) increase by 6 %
If a product has an income elasticity of demand of -2.5 (minus 2.5), and buyers' incomes decrease by 50%, then: O purchases of this product will fall by 50%. O purchases of this product will fall by 2.5%. O purchases of this product will increase by 125%. O purchases of this product will increase by 150%. O purchases of this product will increase by 20%.
Ursula's utility function is In(x) + 6y, her income is 12, and both prices are 1. (a) What is her demand for x? (b) What is her own-price elasticity for x? (c) What is her income elasticity for x?
A college student eats instant noodles twice a week and earns $300 a week working part time. After graduating, he now earns $1,000 a week and eats instant noodles once every other week. What is his income elasticity of demand for instant noodles? -1.62 -0.62 -1.11 -0.90 -0.32 3.
Question 3 When her income falls from $50,000 to $20,000, Arianna increases her monthly purchase of hamburger from 20 pounds to 35 pounds. From the midpoint method, Arianna's income elasticity of demand for hamburgers is O -1.57. O -0.63. 1.57. O 0.54. -0.85.
How do you think income elasticity affects a normal good versus an inferior good?
Suppose the demand for a product is given by D (p) = - elasticity of demand at a price of $27. Elasticity what price do you have unit elasticity? (Round your answer to the nearest penny.) Price 5p+227. A) Calculate the == (Round to three decimal places.) B) At = $
Work out the price elasticity of demand for each and comment on your result. You must also do a comparitive analysis between all the elasticities found.(a) The price of a smart phone is currently £200, and the quantity demanded is 4million. Next year the price falls to £180 and the quantity demanded rises to 6million.(b) The price of pens today is £1, and the quantity demanded is 1million. Next year the price rises to £1.10 and the quantity demanded falls to 950,000