Person A purchases 20 units of a good when her weekly income is $600 and 30...
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Person A purchases 20 units of a good when her weekly income is $600 and 30 units of the good when her weekly income is $420. a. Compute the income elasticity. Round it to two decimal places. b. Is it a normal good or an inferior good? Person A purchases 20 units of a good when her weekly income is $600 and 30 units of the good when her weekly income is $420. a. Compute the income elasticity. Round it to two decimal places. b. Is it a normal good or an inferior good?
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Solution a The income elasticity of demand measures the responsiveness of the quantity demanded t... View the full answer
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