00:01
Okay, so here to assess the income effect for each product, we want to consider their respective income elasticity of demand, which is going to measure how sensitive the quantity demanded is to change it in income.
00:12
So first we have salt.
00:16
So for salt, the income effect for salt would likely be small since it's a basic necessity and its demand is not going to be highly influenced by changes in income.
00:29
Next we have jeans.
00:31
So again, jeans, the income effect for jeans might be moderate.
00:37
So it's a clothing item.
00:39
Jeans could see some changes in demand due to a 10 % increase, but it might not have a substantial impact on consumer spending patterns.
00:47
You know, i would say probably moderate.
00:53
Canned vegetables, veggies.
01:00
The income effect here could also be moderate to potentially large, right? so as a food staple, right, a 10 % price increase might lead to significant changes in demand patterns, especially for price sensitive consumers.
01:20
Next we have gasoline.
01:25
So the income effect here would likely be small to again moderate because gasoline is going to be a necessity for many people.
01:39
It's also influenced by factors like commuting habits and availability of public transportation...