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What is her price elasticity of clothing demand

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Reference no: EM13340016

1. Emily has decided always to spend one-third of her income on clothing.

a. What is her income elasticity of clothing demand?

b. What is her price elasticity of clothing demand?

c. If Emily’s tastes change and she decides to spend only one-fourth of her income on clothing, how does her demand curve change?

What are her income elasticity and price elasticity now?

2. Two drivers—Tom and Jerry—each drive up to a gas station. Before looking at the price, each places an order. Tom says, “I’d like 10 gallons of gas.” Jerry says, “I’d like $10 worth of gas.” What is each driver’s price elasticity of demand?

Reference no: EM13340016

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