Question

Question 4 2.5 pts When incomes in a given country went from $50,000 to $70,000, demand for a certain type of pasta went from 1 million to 1.2 million. Calculate the appropriate type of elasticity, using the methodology in the Power Points. You will interpret your answer in the next question. Enter only numbers, a decimal point and/or a negative sign as needed. Round your answer to two decimal places as necessary, when rounding on intermediate steps, use four places. Question 5 2.5 pts If more than one option is true, you must select all of them to get points for this question: The pasta just described is a(n): normal good unit elastic good complement inferior good inelastic good substitute elastic good luxury good

Answer 1

Aup lahen Income a demand Income goes op $50,000 to $70,000. for certeon type of pasta went from for certain tyl 1 million to 1.2 millim I = 50,000 ta - 70,000 , 0 = 1,000,000 0 - 1,200,000 Income Elasticity EI = 0. oq. Il 859 , 09 = = 1,200,000 - 1,000,000 200,000 DI = = Ig - II 70,000 50,000 $ 20,000 2,00,000 20,000 80,000 1,000,000 = = Datang 0.50 Income elasticity ICD 20.50 it means if income increased by I to then demand for certain type of basta increases by 0.50%.

Aup - If more than one option is true, then the pasta just described as a Normal good & Because demand of pasta and income of consumer hag a positive relasion - ship. It means of income increases than oemand of Normal goods are also increase.. il asta is a Normal good. Inelastic Goods pasta is an Inelastic good because the elasticity of income is less than 1 ire ook therefore when elasticity is less than 1 of any good then that good is inelastic good it means income change in income was. affect the demand of good as smaller. re in this two option ① Normal good n o Inelastic good,