If the demand curve for coconut oil is expressed as q=1200-10p+16p_p+0.2y, where q is the quantity of coconut oil demanded in thousands of metric tons per year, p is the price of coconut oil in cents per pound, p_p is the price of palm oil in cents per pound and y is the income of consumers. assume that p is initially 50 cents per pound, p_p is 30 cents per pound, and q is 1300 thousand metric tons per year. the income elasticity of demand for coconut oil is.

Susie buys two goods - rounds of golf and massages. suppose that the price of a round of golf is $20, and the price of a massage is $30. in a typical week susie will play two rounds of golf, getting 20 units of satisfaction from the second round. she normally buys three massages each week, with the third giving her 30 units of satisfaction. if she were to buy a fourth massage in a week, it would give her 20 units of satisfaction. if the price of massages is reduced to $15, which of the following outcomes might we expect to occur? a) susie would leave her consumption choices unchanged because of diminishing marginal utility in the consumption of massages. b) susie would buy more massages and more rounds of golf, as predicted by the substituion effect. c) susie would buy more massages and fewer rounds of golf, as predicted by the substitution effect. d) susie would buy more massage and fewer rounds of golf, as predicted by income effect.