Business, 31.07.2019 02:30 kyleighott

During a recession, median income falls by 15%. if the demand for grapes falls by 12%, grapes are a(n) good with an income elasticity of demand of normal; -0.8 inferior; 0.8 normal; 0.8 inferior; -0.8

Answers: 1

Show answers

Answers

During a recession, median income falls by 15%. If the demand for grapes falls by 12%, grapes are a normal good with an income elasticity of demand of 0.8.

To find the income elasticity of demand follow this equation:
income elasticity of demand = change in demand/change of income
income elasticity of demand = 0.12/0.15 = 0.8

Grapes are a normal good because the income elasticity of demand is greater than zero.

Answer from: lyndamahe0

During a recession, the median income falls by 15%. If the demand for grapes falls by 12%, grapes are a normal good with an income elasticity of demand of 0.8. This implies the correct answer is 0.8 normal.

Income elasticity demand measures how some factors affect how consumers demand a product.

Some of the factors that could affect the demand for a product include price and income.

Further Explanation

Income elasticity demand is meant to reveal the extent to which the rise in consumer’s income affects the demand for a particular product.

Income elasticity can be expressed as:

Income Elasticity of Demand (YED) = % change in quantity demanded / % change in income

From the given question:

Change in demand = 0.12 Change of income = 0.15

If you substitute the value, then you have:

Income elasticity of demand = 0.12 / 0.15

= 0.8

Normal goods are accompanied by positive income elasticity of demand. This also means that more quantity is demanded as the income of the consumer increases.

However, there are five types of income elasticity of demand and these include

High Unitary LowZero Negative

Therefore, during a recession, the median income falls by 15%. If the demand for grapes falls by 12%, grapes are a normal good with an income elasticity of demand of 0.8

LEARN MORE:

During a recession, median income falls by 15%. if the demand for grapes falls by 12% If the income elasticity of a good is 0.8, what do we know about the good

KEYWORDS:

recessiongrapesnormal goodincome elasticity of demand0.8 normal

Answer from: Quest

Yikes. that sucks dide

Answer from: Quest

our agriculture industry and our business industry

Another question on Business

Business, 21.06.2019 22:40

In allentown, pennsylvania, in the summer of 2014, the average price of a gallon of gasoline was $3.68long dasha 22-cent increase from the year before. many consumers were upset by the increase. one was quoted in a local newspaper as saying, "it's crazy. the government should step in." source: sam kennedy, "valley feeling pain at the pump," (allentown, pa) morning call, june 21, 2014. suppose the government had stepped in and imposed a price ceiling equal to old price of $3.46 per gallon. a. using the line drawing tool, draw and label the price ceiling. carefully follow the instructions above, and only draw the required object.

Answers: 3

Answer

Business, 22.06.2019 13:20

Suppose farmer lane grows and sells cotton in a perfectly competitive industry. the market price of cotton is $1.64 per kilogram, and his marginal cost of production is $1.44 per kilogram, which increases with output. assume farmer lane is currently earning a profit. can farmer lane do anything to increase his profit in the short run? farmer lane: a. cannot do anything to increase his profit. b. may or may not be able to increase his profit. c. can increase his profit by raising his price. d. can increase his profit by producing more output. e. can increase his profit by shutting down.

Answers: 1

Answer

Business, 22.06.2019 21:00

You have $5,300 to deposit. regency bank offers 6 percent per year compounded monthly (.5 percent per month), while king bank offers 6 percent but will only compounded annually. how much will your investment be worth in 17 years at each bank

Answers: 3

Answer

Business, 23.06.2019 02:00

Which of the following is the best example of substitution? a. movie producers begin making more comedies because they cost less to make than action films. b. people walk out before the end of a movie because the acting and the plot are terrible. c. people at the movie theater switch from popcorn to candy because popcorn has gotten too expensive. d. more people begin going to matinee movies instead of night movies to save money on the tickets.

Answers: 2

Answer

You know the right answer?

During a recession, median income falls by 15%. if the demand for grapes falls by 12%, grapes are a(...

Questions