Calculate the income elasticity of demand

Assignment Help Econometrics
Reference no: EM13204599

Given the following information, calculate the income elasticity of demand using the midpoint formula.

a. Nancy's income increases from $20,000 to $30,000 and her consumption of spaghetti changes from 10 pounds per month to 2 pounds per month. Calculate the income elasticity of demand.

b. Interpret the result.

Reference no: EM13204599

Questions Cloud

Normal healthy individual who has healthy functioning kidney : Can hypernatremia be caused by eating too much salt in an normal healthy individual who has healthy functioning kidneys?
What are the company daily fixed costs : The RideEm Bicycles factory can produce 110 bicycles in a day at a total cost of $10,600 and it can produce 130 bicycles in a day at a total cost of $11,200. What are the company's daily fixed costs.
Values make a difference in today’s system of justice : Do you believe that your values make a difference in today’s system of justice? Provide examples and explain your answer. Explain how Aristotle and Plato associated status with justice. Has it changed today?
How many children were at the reunion : cobb family decided to go roller skating for their reunion. There was a total of 44 people there and all went skating. If an adult admission was $5.00 and a childs admission was $3.00 and they paid a total of $168.00. How many children were at the..
Calculate the income elasticity of demand : Given the following information, calculate the income elasticity of demand using the midpoint formula. a. Nancy's income increases from $20,000 to $30,000 and her consumption of spaghetti changes from 10 pounds per month to 2 pounds per month.
Explain what fraction of the initial kinetic energy : What fraction of the initial kinetic energy of the cars is lost during this collision?
Which lockers remained open : The fourth student changed every fourth locker, and so on. when all 500 students had taken a turn, which lockers remained open?
Compute vlo''s fixed-floating and net cash payments : Suppose Valero Energy (VLO) is planning on buying 100,000 barrels of crude oil each month for the next 6 months. VLO is concerned that the price of crude oil will rise.
Find the true course and the ground speed of the plane : The ground speed of the plane is the magnitude of the resultant. Find the true course and the ground speed of the plane.

Reviews

Write a Review

Econometrics Questions & Answers

  Compute the irr of each investment

a. Compute the IRR of each investment b. At MARR=15% determine the acceptability of each project c. If A and B are mutually exclusive projects, which project would you select based on the rate of return of incremental investment

  Define money as equal to the total amount of debt in economy

suppose that a researcher discovers that a measure of the total amount of debt in the U.S economy over the past 20 years was a better predictor of inflation and the business cycle than M1 or M2. does this discovery mean that we should define money..

  Interpretation for the regression coefficient

Chez Henri is a restaurant chain that operates in forty different cities. It employed an economist to determine the factors affecting the demand for its sales.

  Determine the growth rate of the economy''s real gdp

Assume that population is 100 in year 1 and 102 in year 2. What is the growth rate of real GDP per capita? (Instructions: Round your answer to two decimal places.) The growth rate of the economy's real GDP per capita = %

  What is the required reserve ratio

A depository institution holds $150 million in Required Reserve and $10 million in Excess Reserves. Its remaining assets include $440 million in Loans and $150 million in Securities. If the institution's only liabilities are transaction deposits, ..

  Calculate the number of workers to be laid off

For both sets of calculations, compare the firm's output price and the calculated average variable cost and average total cost. Should the firm shutdown immediately when the total fixed cost equals $1,000,000 Should the firm shut down immediately ..

  Determine a salvage value for the beta system

a. Determine the Equivalent Annual Costs of the two alternatives and recommend the economically superior system.b. Determine a Salvage Value for the Beta system such that the Beta system will have an Equivalent Uniform Annual Cost equal to the Alph..

  What is the size of your mpc and mps

Keynes rejected the classical notion of Say's law. He argued that under-spending was very likely. Keynes focused on aggregate demand (total spending) as being the key determinant to the level of macroeconomic activity not aggregate supply which wa..

  What is the current intrinsic value of the firms stock

Portman has 500,000 shares outstanding and Judy Davis, and investor, holds 40,000 shares. Suppose Portman is considering issuing 100,000 new shares at a price of $50 per share. If the new shares are sold to outside investors, how much will Judy's ..

  Salary of manager in competing firms

You are attending the yearly shareholder's meeting of PIC firm. A fellow stockholder points out that manager of PIC received $100,000 last year, while the manager of a rival company, CUP Enterprises, earned only $50,000.

  Determine constant interest rate remain

The company's income statement indicates current profits of $15,000, which have yet to be paid out as dividends. Assuming the company will remain a "going concern" indefinitely and that the interest rate will remain constant at 6 percent,

  What effect will the have on checkable deposits

If you decide to hold $100 less cash than usual and therefore deposited $100 in cash in the bank, what effect will this have on checkable deposits in the banking system if the rest of the public keeps its holding of currency constant

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd