Table 5-7
The following table shows a portion of the demand schedule for a particular good at various levels of income.
-Refer to Table 5-7. Using the midpoint method, at a price of $12, what is the income elasticity of demand when income rises from $5,000 to $10,000?
A)0.00
B)0.41
C)1.00
D)2.45

Question

Table 5-7
The following table shows a portion of the demand schedule for a particular good at various levels of income. 
-Refer to Table 5-7. Using the midpoint method, at a price of $12, what is the income elasticity of demand when income rises from $5,000 to $10,000?
A)0.00 
B)0.41 
C)1.00 
D)2.45

Quizplus · Accepted Answer

The midpoint method calculates the income elasticity of demand as the percentage change in quantity demanded divided by the percentage change in income. At a price of $12, the income elasticity is 1.00, indicating a proportional change in quantity demanded with income.

Table 5-7 The Following Table Shows a Portion of the Demand Schedule