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14 Sep 2018

How are the following calculations are made?

When income increased by 10%, the quantity of memberships of athletic clubs

increased by 15 percent, the quantity demanded of spring water increased by 5

percent, and the quantity demanded of soft drinks decreased by 2 percent. Use the

a. Is club membership a normal or an inferior good?

b. Is demand for club membership income elastic or income

inelastic?

c. Is spring water a normal or an inferior good?

d. Is soft drink a normal or an inferior good?

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21) When Erika's income increases by 6 percent, her demand for tickets to professional hockey games increases by 3 percent. Erika's demand for tickets is income For Erika, hockey tickets are good. A) inelastic; a normal B) inelastic; a normative C) elastic; a normal D) elastic; an inferior E) inelastic; an inferior

Data collected from the economy of Cardtown reveals that a 16% increase in income leads to the following changes:

â¢	A 6% increase in the quantity of chips demanded
â¢	A 14% decrease in the quantity of clubs demanded
â¢	A 29% increase in the quantity of diamonds 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.)

Good	Income Elasticity of Demand	Normal or Inferior Good
Chips	choose one: -2.67, -0.37, 0.38, 2.67
Clubs	choose one: -1.14, -0.88, 0.88, 1.14
Diamonds	choose one: -1.81, -0.55, 0.55, 1.81

Which of the following three goods is most likely to be classified as a luxury good ?

Chips

Diamonds

Clubs

*Please provide the answer but also explain what is inelastic, elastic,unitary elastic

*Please explain elasticity of demand values

*Please explain what is an inferior good, how to obtain the answer.

1) If the price of gasoline increases 10% and quantity demanded decreases by 5%, then the demand curve for gasoline is:

A) inelastic.

B) elastic.

C) unitary elastic.

D) a perfect substitutable good.

2) If a good has an elasticity of demand of 21, then we say the good is:

A) highly inelastic.

B) unitary elastic. C) not elastic.

D) highly elastic.

3) For inferior goods, when an individual's income decreases, quantity demanded for these goods increases.

A) True

B) False

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