Elasticity Sample Problems
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9.) If there has been a 10 percent increase in consumer income between two periods, what was the percentage change in the demand for gasoline?
(Hint: Use the income-elasticity values in Table 3-4.)
Table 3-4 Estimated income elasticity of Demand
Commodity Income Elasticity
Gasoline (US) 1.20
12.)
a) If the price of pork increases by 10 percent, by how much does the demand for beef change?
(b) If the price of entertainment increases by 10 percent, by how much does the demand for food change? (Hint: Use the cross-price elasticity values in Table 3-5)
Table 3-5 Estimated Cross-Price Elasticity of Demand (Exy)
between Selected Commodities
Commodity X Commodity Y Cross-Price Elasticity
Entertainment (US) Food (US) -0.72
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Chapters 3: Discussion Questions
9.) If there has been a 10 percent increase in consumer income between two periods, what was the percentage change in the demand for gasoline? (Hint: Use the income-elasticity values in Table 3-4.)
Table 3-4 Estimated income elasticity of Demand
Commodity Income Elasticity
Gasoline (US) 1.20
Income elasticity of demand = Percentage change ...
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