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A winery estimates that the demand for its fine Owner's Select, has an income elasticity of 2, where income refers to the income per capita of its customer base. If the per capita income of its customers increases from $50,000 to $52,500, (assuming all relevant prices remain unchanged) the change in demand for Owner's Select is closest to:
1. A decrease of 0.10%
2. An increase of 0.10%
3. An increase of 2%
4. An increase of 10%
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Illustrate wwhat is the effect on the market for one hour of babysitting services in Middling today.
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