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Question
Table 6-6| Quantities Purchased | Quantities Purchased | ||
| Income | Prices | Good X | Good Y |
| $30,000 | Px = $6, Py = $3 | 2 | 20 |
| 50,000 | Px = $6, Py = $4 | 5 | 10 |
Refer to Table 6-6.
a. Using the information in the table, calculate the income elasticity of demand for good X and characterize the good. Use the midpoint formula.
b. Can you calculate the income elasticity of demand for good Y? If you can, show your calculation and characterize the good. If you cannot, explain why.
Answer
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