Suppose that your demand schedule for motor vehicles is as follows: Price Quantity Demanded (income = $15,000) Quantity Demanded (income = $24000) 640 8500 7400 920 7150 6900 1120 6450 5830 1300 5895 5385 1430 4950 4730 i. Calculate your price elasticity of demand as the price of motor vehicles increases from $920 to $1300 when income is $15,000. Is the good elastic or inelastic?  ii. Calculate your income elasticity of demand as your income increases from $15,000 to $24,000 if the price moves from $640 to $1,120. What does the value tell you about the good?

Q: 1.

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