economics

posted by .

suppose the income elasticity of demand for toys is +2.00. this means that a. a 10 percent increase in income will increase the purchase of toys by 20 percent b. a 10 percent increase in income will increase the purchase of toys by 2 percent c. a 10 percent increase in income will decrease the purchase of toys by 2 percent d. toys are an inferior good.

  • economics -

    Income (I) elasticity is (%change Q)/(% change I).
    So, you have (%change Q)/(10%) = 2.0 So, (%change Q) must be......

  • economics -

    a

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Managerial Economics

    I need assistance with the following question: A researcher estimated that the price elasticity of demand for automobiles in the United States is -1.2, while the income elasticity of demand is 3.0. Next year, U.S. auto makers intend …
  2. Economics- please check

    Please check to see if my answers are correct. Complete each sentence by choosing the correct answer from the list of terms below. You will not use all of the terms. *normal good *complements *income effect *demand curve *ineleastic …
  3. economics

    I know this might be basic.....but I am still not sure about subject of elasticity?
  4. Economics

    The Own price elasticity of demand for good X is -2, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is -6. Determine how much the consumption of this good …
  5. Managerial Economics

    Please help with this question: A researched estimated that the price elasticity of demand for automobiles in the U.S. is -1.2, while the income elasticity if demand is 3.0. Next year, U.S. auto makes intend to increase the avg price …
  6. economics

    If there has been a 10 percent increase in consumer income between two periods, what was the percentage change in the demand for foreign travel. The income elasticity for foreign travel is 1.93
  7. business math

    The GDP of Company E was $500 million in 1995. The population was 1 million, so the average income was $500. As a result of economic growth, GDP in 2005 was $1,500 million. The population was already 2 million. What was the average …
  8. MANAGERIAL ECONOMICS

    In attempt to increase revenue and profits, a firm is considering a 4 percent increase in price and an 11 percent increase in advertising. If the price elasticity of demand is -1.5 and the advertising elasticity of demand is +0.6 would …
  9. Economics

    Some people would prefer a single income tax rate because it?
  10. Benue State University Makurdi

    In attempt to increase revenue and profits, a firm is considering a 4 percent increase in price and an 11 percent increase in advertising. If the price elasticity of demand is -1.5 and the advertising elasticity of demand is +0.6 would …

More Similar Questions