Answered: Suppose that when income decreases by…

Suppose that when income decreases by 4%, the quantity of margarine demanded rises by 1%. Knowing this, the income elasticity (EI) for margarine is (A) EI = .25 (B) EI = -1/4 (C) EI = -4 (D) EI = -3

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 7PA: Suppose that your demand schedule for pizza is as follows: a. Use the midpoint method to calculate...

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Question

100%

Suppose that when income decreases by 4%, the quantity of margarine demanded rises by 1%. Knowing
this, the income elasticity (EI) for margarine is
(A) EI = .25
(B) EI = -1/4
(C) EI = -4
(D) EI = -3

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