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The Gondwanaland Chairman of Production reported that the new Altair chariots (most modern, horse drawn family chariot) had a PRICE elasticity of 3 and an INCOME elasticity of 2. The supply of these Altair chariots is elastic. Evaluate the following statements and explain why you think they are true, or false.
a. A 20% increase in the price of the Altair chariot will cause the quantity demanded to fall by an astounding 60%.
b. An increase in Gondwanaland consumers' incomes will cause prices to rise, but the total quantity demanded will also increase
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