Last year, Sheila bought 6 pairs of shoes when her income wa$40,000. This year,
ID: 1251399 • Letter: L
Question
Last year, Sheila bought 6 pairs of shoes when her income wa$40,000. This year, her income is $52,000 and she purchased 7pairs of shoes. Holding other factors constant and using themidpoint method, it follows that Sheila's elasticity of demand isabout.a. 0.59 and Sheila regards shoes as an inferior good.
b.0.59 and Sheila regards shoes as a normal good. c. 1.7 and Sheila regards shoes as an inferior good. d. 1.7 and Sheila regards shoes as a normal good.
Last year, Sheila bought 6 pairs of shoes when her income wa$40,000. This year, her income is $52,000 and she purchased 7pairs of shoes. Holding other factors constant and using themidpoint method, it follows that Sheila's elasticity of demand isabout.
a. 0.59 and Sheila regards shoes as an inferior good.
b.0.59 and Sheila regards shoes as a normal good. c. 1.7 and Sheila regards shoes as an inferior good. d. 1.7 and Sheila regards shoes as a normal good.
Explanation / Answer
Answer B. 0.59 and Shiela regards shoes as a normal good. Explanation Income elasticity (7-6) / 6 (52,000-40,000) / 40,000 0.167 0.300 0.589 A positive income elasticity of demand isassociated with normal goods, an increase in income will lead to arise in the quantity demanded.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.