Question

Month Income (hourly wage) Quantity Demanded October $44 130 November $43 145 December $51 121 January $39 154 February $38 111 What is the income elasticity of demand for January, and is it an inferior or normal good? Group of answer choices -0.89, and it is an inferior good 1.29, and it is an inferior good -0.67, and it is an inferior good 0.36, and it is an inferior good 

          Month Income (hourly wage) Quantity Demanded
October $44 130
November $43 145
December $51 121
January $39 154
February $38 111

What is the income elasticity of demand for January, and is it an inferior or normal good?
Group of answer choices
-0.89, and it is an inferior good
1.29, and it is an inferior good
-0.67, and it is an inferior good
0.36, and it is an inferior good
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Added by Gail B.

Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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Month Income (hourly wage) Quantity Demanded October $44 130 November $43 145 December $51 121 January $39 154 February $38 111 What is the income elasticity of demand for January, and is it an inferior or normal good? Group of answer choices -0.89, and it is an inferior good 1.29, and it is an inferior good -0.67, and it is an inferior good 0.36, and it is an inferior good
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Transcript

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00:01 Hello, we need to calculate the income elasticity of demand.
00:12 Income elasticity of demand and let's use the midpoint method, the midpoint formula.
00:22 So after this arrays, the new quantity, quantity demanded is 5 times and the old one is 3, 5 minus 3, divided by the midpoint the number which is between 5 and 3 and it's 4 and we divide by the similar change in income the new income is 33 ,500 minus 31 ,000 divided by the midpoint and the midpoint is 32 ,250 and 250 and if we calculate, our answer is 6 .45, which is much greater than 1...
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