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Sebastian received a raise this year so his income climbed from $45,000 to $52,000. Last year...

Sebastian received a raise this year so his income climbed from $45,000 to $52,000. Last year Sebastian purchased 2 sunglasses. This year he has purchased 7 sunglasses. Assuming that all of the other things remain constant, what type of a good are sunglasses and what type of income elasticity of demand does Sebastian have?

A; The sunglasses are a normal good and the income elasticity of demand is .13.

B :The sunglasses are a superior good and the income elasticity of demand is 7.7.

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Answer #1

income elasticity of demand

=((7-2)/((2+7)/2))/((52000-45000)/((45000+52000)/2))

=7.7

as income elasticity of demand that means the The sunglasses are a superior good

so answer will be: B :The sunglasses are a superior good and the income elasticity of demand is 7.7

the above is answer..

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