ing The Price × y Mindlap C Not secure ng.cengage.com/static/nb/ui/index.html?mb

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ing The Price × y Mindlap C Not secure ng.cengage.com/static/nb/ui/index.html?mbld-7215928 &parentld-27; 1803639 Id-27 1803S40&eISBN; +9 78 1 337096577 5% MINDTAP Homework (Ch 05) Due on Feb 4 at 11 PM EST Data collected from the economy of Pokerville reveals that a 12% decrease in income leads to the following changes: ·A 30% decrease in the quantity of aces demanded ' A 5% increase in the quantity of spades demanded ·A 17% decrease in the quantity of flops demanded Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on its income elasticity, indicate whether each good is a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign confers important information.) Normal or Inferior Good Good Aces Spades Flops Income Elasticity of Demand Which of the following three goods is most likely to be classified as a luxury good Spades Type here to search

Explanation / Answer

The demand for a product is altered by many factors which includs its own price, income of the consumer and the availability of related goods.

Income elasticity of demand indicates us the percentage change in quantity demanded for each 1 percent change in the income of the consumer. Here we see that

Aces are luxury because their income elasticity of demand is very high.

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