Income elasticity, Microeconomics

With the recession, average incomes have fallen from $44,375 to $41,720.  Before the recession Groucho's Gizmos sold 600 gizmos a month. As an economics, predict the number of gizmos that will be sold for the following income elasticities and explain what type of good a gizmo is in the eyes of consumers (you must use the income elasticity coefficient to explain your answer).

a)  EI = 1.5       b)  EI = 0.5      c)  EI = -2.0

Posted Date: 3/7/2013 4:48:37 AM | Location : United States

Related Discussions:- Income elasticity, Assignment Help, Ask Question on Income elasticity, Get Answer, Expert's Help, Income elasticity Discussions

Write discussion on Income elasticity
Your posts are moderated
Related Questions
(a) Describe the different types of inflation in a country. (b) Describe the trade-off between inflation and unemployment, using appropriate diagrams. (c) Mauritius has bee

How might governments use buffer stocks to stabilise prices? Explain/outline a buffer stock scheme in brief as a method for government (in this case) to warehouse (stock) goods

Yuen, a travelling salesman for snake oil, can produce the stuff at a marginal cost of 1. There are 100 potential customers in Vernon, each of whom has the following demand functio

1. Let's get some practice plotting budget constraints. On the graph below, plot the budget constraints when: a. (Use Black): P x = 57,P y = 18, and M = 342. b. (Use Blue):

Using the key distinguishing features of any market structure describe the market structure for the South African mobile telecommunications industry

Calculate the cross-price elasticity of demand between computers and printers, where a 10 percent decrease in the price of computers results in a 15 percent increase in the quantit

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Socialist Economy: The material means of production are owned by the whole community represented by State under socialist form of economy. All members have equal right in the benef

Economic Reforms and Reduction of Regional Disparities: Another important objective of development is to reduce regional disparities. Government has been helping the backward