Suppose Mark Sanchez, quarterback of the New York Jets, increased his annual income 20 percent by endorsing Kellogg's Com Flakes. If his demand for hair shampoo didn't change, what can we say about his income elasticity of demand for the shampoo? Suppose he decides to upgrade his housing, moving from his 51 million home to a $1.5 million home. What can we say about his income elasticity of demand for housing?
Answer to relevant QuestionsWhy are we relatively insensitive to price changes affecting low-priced goods such as bubble gum? Why do economists complicate the equation for elasticity by averaging prices and quantities? Calculate the cross elasticities between the Snickers bar and M&Ms within the S2 and $1 range, and within the SI and $0.50 range. What proof can you offer to show that these are substitute or complementary goods? Suppose you went to a pet shop to buy a puppy. You saw one you liked, and it cost as much as the highest price you would pay. You take it home and immediately fall in love with it. The next day, your friend offers you twice ...The reason farmers have not done as well as the nonfarm population is because: a. The government has interfered in the agricultural market. b. The character of demand and supply in the farm goods market works against the ...
Post your question