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
Balance of payments account: The foreign exchange market is an organizational setting within which individuals, business firms, banks etc buy and sell foreign currency. It has

• If Mary uses all her resources to produce hats, she can produce 48 hats an hour. • If she uses all her resources to produce apple pies, she can make 24 apple pies an hour. how

Q. Explain about Employment Rate? Employment Rate: This measures share of working age adults who are in fact employed in a paying position. Employment rate can be a better in

What two important functions are performed by the price system? (1) The price system is an automatic method for distributing goods and services. (2) The price system defines t

Ask question #what is an indifference curveMinimum 100 words accepted#

Discuss how the opportunity cost principle influence a supplier''s decision to supply labour

(a) Suppose Scientists discover that eating soybeans prevents cancer and heart disease.

What do you mean by Consumption Set? Consumption Set: We notice a consumer faced along with possible consumption bundles within consumption set X. We generally assume that X

elasticity of demand

What is use of analytical tools in the modern economics? Analytical Tools: Modern economics also gives different powerful analytical tools which are usually specified by geo