Exhibit 5-22

-Use the information in Exhibit 5-22 to calculate the value of income elasticity of demand for Good A.
A) 1
B) 2/9
C) 3/11
D) 11/3
E) 9/2

Question

Exhibit 5-22
 
-Use the information in Exhibit 5-22 to calculate the value of income elasticity of demand for Good A.
A) 1 
B) 2/9 
C) 3/11 
D) 11/3 
E) 9/2

Quizplus · Accepted Answer

The income elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in income. Based on the information provided in Exhibit 5-22, the correct calculation results in an elasticity of 3/11.

Exhibit 5-22 -Use the Information in Exhibit 5-22 to Calculate the Value